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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: The Duke of URL© who wrote (167196)	6/28/2002 1:08:21 AM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 186894

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

To: The Duke of URL© who wrote (167196)	6/28/2002 7:36:19 AM
From: Road Walker	Respond to of 186894

Duke, I was doing business with two companies that were involved in a hostile takeover attempt in the 70's, I was pretty close to those that were involved. The smaller company was about number 5 in it's industry, and bought up (if I remember correctly) about 10% of the leading company in the industries stock, working with one of the Wall Street take-over wizards. Truth be known, they were never planning a take-over. The stock doubled in value as word got out; in defense the industry leader had to do an LBO, and take on huge amounts of debt. The company that was taking over the industry leader walked away with a huge profit, in a very short period of time. More than they would make from operations in 10 years. As it happens, the industry was just beginning a major transformation. Because of it's new debt, the industry leader couldn't participate, and slowly, steadily began to lose market share. Now the company is gone, bankrupt after downsizing many times. The people that worked at the company were some of the best and brightest in the industry. Dealing with them, you just felt it was a good company, nice, ethical, hard working folks. But after the "hostile take over", they were doomed. The shareholders made a bundle, but I wonder what the company would be worth today, if the "take over attempt" had never happened. So my personal experience with hostile take overs is not positive. John