UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next
Author: kahunacfa Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1264  
Subject: Re: Fresh Del Monte Produce Inc. (FDP) - PART 5 Date: 3/2/2008 5:06 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
...I'm not a particular fan of socially responsible investing but, like everyone else, I do have enough common sense to understand that an unethical management can became a true enemy to the minority shareholder. There is in fact a series of things that prevent the creation of a "conflicting interests" situation between Abu-Ghazaleh and small investors: the fact that he already owns 55% of FDP (not much sense in further diluting equity) and that the large majority of his personal wealth is tied up in the company. Right now his interests are very much aligned with the ones of the rest of the investors. That is something that might drastically change in the future.

However, FDP is sufficiently undervalued (IMO) as to allow me to overlook that. I will, nonetheless, be in constant vigilance of Mr. Abu-Ghazaleh's maneuvers.
- DCFNewbie | Date: 10/10/2004 9:37:33 PM | Number: 1257

Many years ago I owned shares of a small niche software company. Management owned 54% of the shares. The company did OK, I made money having bought around $4 or so, and taken out by a management lead LBO at $15. A fair price would have been $19-$22 per share.

Management, of course, obtained a Fairness Opinion from a small, local, no-name investment banker stating that $15 per share was a "fair price" - it most assuredly was not!!!

Litigation ensued, an out-of-court settlement followed after several years. Since that experience, I almost never invest in a company where insiders own more than about one-third of the company's shares. With majority control, insiders can and sometimes will do anything, much to the detriment of minority shareholders.

Kahuna,CFA
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next

Announcements

2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement