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Matt Levine

Conflicted Deals and Stress Tests

Also account intrusion, blockchains, Panama, Trump and a rare unicorn IPO.


If you are the ambitious founder, chief executive officer and largest shareholder of a big public company, it is not that hard to build your empire with minimal shareholder oversight. You want your company to buy another company? Just offer a big enough premium to convince the target's shareholders. (Don't worry about your own shareholders; unless the deal is for stock and more than 20 percent of your company, they don't get to vote.) You want your company to buy another company that you also control? Just have each company appoint a special committee of independent directors; if they're directors at your companies, presumably they're pre-disposed to like you. You can't just do whatever you want -- you, and your directors, have fiduciary duties to the public shareholders -- but if you are set on value-destructive self-aggrandizement, you can find a way.