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Fuckin' Magnets, How Do They Work?
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Looks like the shares must be voted in support of the board, which I guess has the effect of diluting other shareholders.I don't see anything about them being non-voting. The article says that the government doesn't get a board seat or any special corporate governance provisions, which would be relatively common in a commercial private equity purchase (I mean an equity purchase by a private party; not a PE fund). But if it has 10% voting control, that's not quite a controlling stake but it's pretty big and comes with a lot of power.
It does more than just dilute other shareholders. It means that the board now has very little chance of being ousted. I mean, you could think of it as dilution, but it's stronger than that phrase usually means. Dilution would be the government getting shares and then being free to vote them as it chooses. The people who controlled 100% of the vote now collectively control 90%.Looks like the shares must be voted in support of the board, which I guess has the effect of diluting other shareholders.
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Intel says Trump deal has risks for shareholders, international sales
President Donald Trump called the agreement "a great Deal for America" and said the building of advanced chips "is fundamental to the future of our Nation."www.cnbc.com
But that doesn’t seem like it gives the government control of Intel. If anything, it seems like it makes the board control stronger.It does more than just dilute other shareholders. It means that the board now has very little chance of being ousted. I mean, you could think of it as dilution, but it's stronger than that phrase usually means. Dilution would be the government getting shares and then being free to vote them as it chooses. The people who controlled 100% of the vote now collectively control 90%.
Here, though, the 10% is going to the board. Add in, say, 5% for shareholdings of the board and the executives and that's a 15% homecourt advantage for the incumbents. To prevail on a proxy contest, assuming a 90% turnout, any challenger would need to win 45% from the outstanding 75%, roughly 57% from an eyeball calculation. Running a proxy contest is expensive and people don't like to even try unless they think they have a good chance. Most proxy contests are uphill battles even without that 10% on the scale. And that's assuming that the board/execs only own 5%. I don't really know what they own.
Not technically, no. I would guess that the majority of the corporate law professoriate would be saying something like, "as a practical matter, it would be extremely awkward for the Intel board not to heed the administration's wishes." I can't explain that, because I've never really understood it. The politics of corporate governance was my weakest area of the field, in part because I've not had much practical experience with it and also because I find it disagreeable. But people who purport to know would probably say that the government would, at a minimum, have a lot of influence.But that doesn’t seem like it gives the government control of Intel. If anything, it seems like it makes the board control stronger.
The last point is key. The government has a lot of control with Apple and Nvidia and doesn't own anything.Not technically, no. I would guess that the majority of the corporate law professoriate would be saying something like, "as a practical matter, it would be extremely awkward for the Intel board not to heed the administration's wishes." I can't explain that, because I've never really understood it. The politics of corporate governance was my weakest area of the field, in part because I've not had much practical experience with it and also because I find it disagreeable. But people who purport to know would probably say that the government would, at a minimum, have a lot of influence.
Plus there is always the possibility that the government tries to give Intel the Harvard/Columbia treatment, hounding them with bullshit ad infinitum.
“… But Ms. Cook, who was confirmed by the Senate to the position on the Fed’s board, has not been charged with any wrongdoing or convicted of a crime. And she could seek to fight her dismissal, touching off what could be a landmark battle on the president’s power over the Fed.
… All along, the president has made no secret of the true source of his anger with the Fed, which he has savaged for months for keeping borrowing costs higher than he would like.
… Under the Federal Reserve Act, the law that charters the central bank, Mr. Trump may dismiss a governor only if he can demonstrate cause, typically defined as professional neglect or malfeasance. In recent days, legal experts have questioned whether the president could satisfy that burden, given the fact that the allegations against Ms. Cook have not been proved in court and involve personal matters.
… For the financial system, the consequences threatened to be far greater, given the unique and defining role the Fed plays as an apolitical arbiter of monetary policy. With Ms. Cook’s departure, Mr. Trump could appoint a new loyalist to the critical board who shares his desire for a swift and dramatic reduction in interest rates, even though economists fear that a premature reduction could cause severe damage….”
“… The department said the Biden administration illegally created Natcast, and as a result the agreement granting the organization up to $7.4 billion in taxpayer money is invalid.
Natcast was an "effort to skirt clear legal restrictions prohibiting government agencies from establishing corporations," the Commerce Department said on Monday in a statement, and said that the Biden administration "stacked Natcast with former Biden officials."
… Last week, Natcast said it was aligned closely with the priorities of the White House, saying that it was "a linchpin to realizing a more prosperous, competitive, and secure leadership position for America."
In January the Biden administration announced plans to build a research and development facility in Tempe, Arizona, expected to open by 2028 while another research center opened in Albany, New York, in July…”