I don't disagree with shareholder lawsuits. However, the reality is that such lawsuits never have directly impacted management. The shareholders sue, if the company is found guilty or agrees to a settlement then the penalty is paid from the corporate treasury, which is to say it comes out of the pockets of shareholders in order to compensate an earlier group of shareholders.
If you make the board and the management personally liable for their actions, and their own fortunes and property subject to seizure, then it's an effective weapon. As it exists right now, most managements view those suits as an annoyance they want to get rid of, but nothing that will ever cost them personally.
Of course, with the huge increases in director's insurance premiums lately, that may change. (OTOH, said premiums are usually paid by the company on behalf of directors, so maybe they won't.)
Definitely a complex issue.
Your point about the fact that hostile takeovers for cash are less desirable in this environment is well taken.
The only reason I care is that it destroys the country's ability to allocate capital properly and takes money away from intel.
Well, I'm not sure I'd agree with your assumption that proper allocation of capital necessarily coincides with more investment in Intel at the current time. But then again I'm fairly bearish on technology in general over the 2-3 year term, as most here have realized.
(Former Intel employee, nothing against the company, just see hard times ahead for a while...)
mg |
