Denationalization

Categories: Econ, International

Privatization on its grandest scale. This is what happens when the government of a nation sells an asset to private investors. Privatization can occur on a state, local, municipal, or national level.

For example, if the U.S. government were to sell Death Valley National Park for one millllllllion dollars to Dr. Evil, who swears he'll maintain it as public space and definitely not build an underground secret lair, that would be denationalization. Think: no longer a part of...the nation. Duh.

Related or Semi-related Video

Finance: What is Going Private?4 Views

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Finance a la shmoop what is going private?

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oh wait that's going in private - never mind okay so what is going private well [Girl slams door]

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hold a mirror up to IPO yep initial public offering and you'll see it in

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reverse well that's kind of what going private is the IPO took your company

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public investors public ones bought and sold the stock they were in love with it

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and then they weren't you're sick and tired of dealing with public investors [Company IPO graph appears]

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moodiness and you just want your old company back so the process of going

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private usually involves management ie the people who run the company or new

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management brought in for this purpose taking on large amounts of debt LBO'ing

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leverage buying out the company, or MBO'ing management buying out the company

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and they offer some premium price above where the stock has been trading to then

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own it and delist it off of the exchanges it's trading on like the

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Leany Potty; a great new product for people who don't like to squat yeah it's

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trading at 15 bucks a share after coming public at 12 and at one point kissing a [Leanny Potty share prices appear]

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hundred bucks a share the founder Lionel Leany wants to take it private and will

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offer $18 share for that privilege if investors tender their shares or sell

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them back to the company or buyer buying them well then the company no longer has [Person carrying basket of groceries]

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a ticker symbol stock options the prestige all of which are the fruits of

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being public it's just owned by whoever bought it and they can do more or less

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whatever they want with it at this point they don't have to file public quarterly

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reports they don't have to conform to federal disclosure laws for public

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shareholders they can pretty much ignore the myriad costs of being public and

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just run the business to grow and produce cash for shareholders yeah [People counting cash]

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the benefits of going or being private

Find other enlightening terms in Shmoop Finance Genius Bar(f)