4 ms·
What's the difference between a "controlling stake" and just owning the company?
by JohnWhigham 5y ago
What's the difference between a "controlling stake" and just owning the company?
- tomhoward 5y agoA controlling stake means you own enough shares to have full voting control (i.e., you control the board votes, can appoint the executives and set the company direction) without having to pay for 100% of the shares. There are a few reasons to only acquire a controlling stake rather than 100% of the shares; you might want to preserve capital for other uses, or leave some shares to be traded on public markets so the stock still has a market valuation.
- Ensorceled 5y agoOr to leave key executives and tech leaders with some shares.
- dharmab 5y agoA controlling stake doesn't have to own the majority of the company, just the majority of voting shares. It gives you meaningful influence over the board and executives but does not entitle you to all (or even a majority of) of any profit.