Controlling Interest
Categories: Company Management
You and two friends buy a pizza for $16. There are eight slices. You, being a responsible human being, only want two slices, so you put in $4. Your other friend paid $2 for one slice.
But your friend John, who lives alone and has beer cans laying around, paid $10. He has five slices, or five-eighths of the pizza. If that pizza were a company, and the slices were stock, and represented votes over the future of that pizza, he would have what is known as a controlling interest. However, he only has five slices of pizza...and a bit of a problem with self-control.
A controlling interest is the majority ownership of a company. When you have a controlling interest, you have enough voting rights to steer the direction of the company in your favor. It means you have legal control of the firm, and you can bend the will of the other shareholders, should you wish. It guarantees you the opportunity to feast on the biggest share of dividends, retained earnings, shares should they split, and even cash if the company is sold.
It also provides you enough control to install a board of directors that is favorable to your interests, and most likely gives you the opportunity to assume the role of Chairman of the Board.
That’s way better than just eating a pizza with two dudes.
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Finance: What is Control Value?15 Views
Finance allah shmoop what is control value dance on a
fifty shades thing Well there's a partnership a semi evil
one there was once a tv siri's It was exorbitantly
expensive to produce but everyone wanted to make it So
it ended up being made not by one studio but
by three viacom paramount disney and then news corp fox
Before it was disney news corp fox well each of
the three partners put in a third of the money
and split all the money distributions equally The problem on
the show ended up being hugely successful when it ran
for the first time on network tv so that was
great but now it's in reruns and because all three
competitors generally hate each other he's financially if their job
too none are willing to run the show a lot
on their cable network or broadcast network because then they
generate revenues for their hated competitors so they don't run
the tv series even though people want to see it
And this is a big fat bummer to the actors
writers and producers of the show who were banking on
rerun royalties to pay for their divorces if one of
the studios owned the siri's I'ii controlled it let's call
that siri's sunlight ing well then the siri's would heir
a ton more and presumably generate a ton more desperately
needed revenues What do you think divorce lawyers work for
free Well the control value of owning that asset then
is huge because if it were owned by one player
well then that player could run it again and again
and again and again on their network like think big
bang on tbs and then monetize that asset and massively
so there's Incremental control value with the well controlling a
property And yet it's not to be confused with remote
control value which is about a buck twenty five on 00:01:51.209 --> [endTime] ebay