2 ms·

Article author was confused by the org charts and diagrams, but it looked to me like the founders are setting the public company up to be machine for transferri

Article author was confused by the org charts and diagrams, but it looked to me like the founders are setting the public company up to be machine for transferring investor money to themselves while maintaining voting control and without delivering any additional value. Can someone better versed in finance explain to me how this is not a blatant flimflam to grab the IPO cash?

readams 7y ago
The structure of the company is mostly about making sure that Adam Neuman can minimize his tax burden while maximizing his compensation. It's not really about stealing the IPO cash, but on the other hand nobody is better positioned to take advantage of the value generated by the company than Adam Neuman, and you can be sure, based on the history, that the governance of the company will be driven by primarily what is good for Adam.
- logfromblammo 7y ago
  I don't really see a significant difference between "stealing the IPO cash" and restructuring multiple business entities such that the company's new valuation is predicated on increasing revenues, yet those additional revenues will actually be siphoned off via increased expenses to more closely held companies, rather than reinvested into the public entity, or distributed to its shareholders. Who is dumb enough to fall for this nonsense? I get that a lot of public companies make shady sweetheart/nepotism deals with private companies part-owned by their executives and board members, or friends and family of same, but why would you willingly be principal for an untrustworthy agent?
  - AndrewBissell 7y ago
    The question you need to be asking is "who is corrupt enough to fall for this nonsense?" The IPO will probably distribute the flaming bag of poo to various pensions, ETFs, and other funds where a PM can be leveraged as a single point of failure.

2 ms·

Article author was confused by the org charts and diagrams, but it looked to me like the founders are setting the public company up to be machine for transferri

by logfromblammo 7y ago

readams 7y ago
The structure of the company is mostly about making sure that Adam Neuman can minimize his tax burden while maximizing his compensation. It's not really about stealing the IPO cash, but on the other hand nobody is better positioned to take advantage of the value generated by the company than Adam Neuman, and you can be sure, based on the history, that the governance of the company will be driven by primarily what is good for Adam.
- logfromblammo 7y ago
  I don't really see a significant difference between "stealing the IPO cash" and restructuring multiple business entities such that the company's new valuation is predicated on increasing revenues, yet those additional revenues will actually be siphoned off via increased expenses to more closely held companies, rather than reinvested into the public entity, or distributed to its shareholders. Who is dumb enough to fall for this nonsense? I get that a lot of public companies make shady sweetheart/nepotism deals with private companies part-owned by their executives and board members, or friends and family of same, but why would you willingly be principal for an untrustworthy agent?
  - AndrewBissell 7y ago
    The question you need to be asking is "who is corrupt enough to fall for this nonsense?" The IPO will probably distribute the flaming bag of poo to various pensions, ETFs, and other funds where a PM can be leveraged as a single point of failure.