Saturday, January 17, 2009

Outsider Trading

Here's a story I've been following for a while, and I think it's an excellent example of how a person can make shady deals in the open air and no regulatory agency even takes a second look.

Here's how I see this going down:

1. Stock price at $22.00.

2. Fertitta says "I want to buy the whole company, take it private."

3. Stock prices drop, making it easier to buy.

4. Fertitta announces funding deal, stock prices stabilize.

5. Fertitta claims deal wasn't cool, announces that it "falls through."

6. Stock prices drop, making it easier to buy.

7. Fertitta says "hey, whadda ya know, I now have 57% ownership of the company" made possible because stock prices are now at less than a third of what they were when he began the process.

8. Fertitta gets new funding, made possible by the double savings incurred by having to fund only 43% of a buyout because he owns more than ever, and the stock prices are at less than a third of where they were. So he gets what he wants at a fraction of the expense he would have had to under the previous deal.

Neat how that works out, huh?

I'd like to say that I would be boycotting his restaurants because of these shenanigans, but because his restaurants suck, I already avoid them.

1 comment:

outrigger said...

Money talks and bullshit walks....amazing .