27th September 2006, 4:30 AM
Quote:Why would any company in their right mind own anything less than 51% of their own stock? Isn't that a disaster waiting to happen?
Because it's never that simple. Maybe one of the major stockholders wants to cash out and so he puts his stock on the open market. Maybe the company is in some financial trouble and needs to pay off some of its debts. Maybe the company issued a bunch of stock to expand. There are a variety of reasons why a company might not own 50% of its own stock.
Financially secure companies, though, will generally buy back their stock from the open market from time to time.
Sometimes you get the scorpion.