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492 Views 5 Replies 6 Participants Last post by  thebohunk
Ladies and Gentlemen, the nationalization of the Big 3 automakers.

Just some of the latest filth to come from the Imperial capitol.
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How closely did you read the article? If you had paid attention you would have noticed the phrase 'stock warrants' in there. Do you even know what a stock warrant is? This isn't even close to nationalization. The government isn't buying stock in the auto companies it is just providing them with operating funds in a manner calculated to insure the government does not have any say in running them.

A stock warrant is a contract which gives its owner the right to buy stock at a certain price. Someone who owns stock can vote for company officers and a 20% interest in most cases would be enough to name several members to the board of directors and probably the chairman and CEO and dominate company policy. Someone who owns a warrant has no influence at all. If the stock prices fall they would never be exercised to obtain stock since an outright purchase of stock could be cheaper and if the price goes up they would be sold to recover the money and make some profit.

Frankly, we would be better off if the money were used to acquire 20% of the stock. At least that way we could get rid of upper management and put people in to make decisions based on long term maximization of profits rather than maximum short term gain. This way, the same crowd that made the mess in the first place get to hold on to their jobs.
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