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Adam controls the majority of voting right to the company and the board (made up of VCs) doesn't want a messy legal fight since they stand to lose money if We t

Adam controls the majority of voting right to the company and the board (made up of VCs) doesn't want a messy legal fight since they stand to lose money if We tanks. So a moderate amount of graft is tolerated since the alternative is less desirable.

dooglius 7y ago
Breach of fiduciary duty can be a criminal matter in addition to a civil one.
- amluto 7y ago
  I am not a securities lawyer (or any other type of lawyer), but: if this all blows up, I believe that self-dealing by the executives is an excellent way for creditors to pierce the corporate veil.
devcpp 7y ago
>Adam controls the majority of voting right to the company This alone should be a massive turn-off for investors, nevermind this kind of personal eccentricity that makes this absolutely insane.
- erikpukinskis 7y ago
  I don’t think majority ownership is necessarily a turn on or a turn off. There are cases when a bunch of minority shareholders would be chaotic and prevent the company from making long term bets. There are also cases where minority ownership would allow for stability while cycling through executive turnover and experimentation. Which situation you are in, and whether shareholders would be turned off by majority ownership, is context specific. For example, I think SpaceX would be a less attractive stock if there were only minority stockholders, and having Elon as the majority holder makes it more likely to succeed at going interplanetary, rather than just milking a traditional orbital business model. If your investment thesis depends on a bold bet like that, a single majority shareholder you trust would be a comfort.
  - codeisawesome 7y ago
    SpaceX isn’t a public stock though?
    - erikpukinskis 7y ago
      It still has investors, and shares.
  - Breza 7y ago
    For the SpaceX example, I actually think they'd be better off focusing on the orbital launch market. The dream of affordable and reliable access to space dates back to the 50's and still hasn't been fully realized. In my opinion, that's a bigger deal than trying to get SpaceX to put a payload beyond orbit. I agree with your larger point though.

dooglius 7y ago

Breach of fiduciary duty can be a criminal matter in addition to a civil one.

amluto 7y ago
I am not a securities lawyer (or any other type of lawyer), but: if this all blows up, I believe that self-dealing by the executives is an excellent way for creditors to pierce the corporate veil.

devcpp 7y ago

>Adam controls the majority of voting right to the company This alone should be a massive turn-off for investors, nevermind this kind of personal eccentricity that makes this absolutely insane.

erikpukinskis 7y ago
I don’t think majority ownership is necessarily a turn on or a turn off. There are cases when a bunch of minority shareholders would be chaotic and prevent the company from making long term bets. There are also cases where minority ownership would allow for stability while cycling through executive turnover and experimentation. Which situation you are in, and whether shareholders would be turned off by majority ownership, is context specific. For example, I think SpaceX would be a less attractive stock if there were only minority stockholders, and having Elon as the majority holder makes it more likely to succeed at going interplanetary, rather than just milking a traditional orbital business model. If your investment thesis depends on a bold bet like that, a single majority shareholder you trust would be a comfort.
- codeisawesome 7y ago
  SpaceX isn’t a public stock though?
  - erikpukinskis 7y ago
    It still has investors, and shares.
- Breza 7y ago
  For the SpaceX example, I actually think they'd be better off focusing on the orbital launch market. The dream of affordable and reliable access to space dates back to the 50's and still hasn't been fully realized. In my opinion, that's a bigger deal than trying to get SpaceX to put a payload beyond orbit. I agree with your larger point though.