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Corporate raiding today

Discussion in 'Business & Tax Advice' started by Roparadise, Mar 20, 2012.

  1. Roparadise

    Roparadise BANNED BANNED

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    I was looking at corporate raiders,and some of them have made a ton of money,such as Carl Ichan. I was wondering if the following would be a way to get into the practice in today's world based economy.

    Buying a local business with a good amount of revenue,but the profit isn't so well do to the number of employes and management. Fire the unneeded management,and outsource the workers that have work that can be outsourced to people in countries such as India,china,Estonia etc. Fire the accountants or the firm being used,and replace them with a good computer program.

    Move the company more overseas so that I can lower tax rate from 35% to maybe as low as 10%.

    If I were to do that, could I sell the business for many more times then what I paid for it,within a short amount of time?
     
  2. Roparadise

    Roparadise BANNED BANNED

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    I tried researching the topic some,but it seems like there is nothing on corporate raiding except a few old books,and anti-coporate raid videos on youtube.

    http://www.amazon.com/Predators-Ball-Burnham-JunkBond-Raiders/dp/0140120904/ref=pd_sim_b_2

    http://www.amazon.com/Barbarians-Gate-The-Fall-Nabisco/dp/0061655554/ref=pd_sim_b_2

    http://www.amazon.com/Den-Thieves-James-B-Stewart/dp/067179227X/ref=pd_sim_b_4

    Should one take business courses at a college,before becoming a corporate raider?
     
    Last edited: Mar 25, 2012
  3. Markbh

    Markbh Regular Member

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    What you describe here sounds more like a leveraged buyout or hostile takeover.
    You'll have to be pretty steep in cash to afford that.
    The books you link were either published in or refer to events from the previous century, the world has changed a lot since then.

    Laying off personnel is what's being done globally nowadays. It's also the main reason why middle classes disappear at an alarming speed. Needs a bit of extra cash if the employees had long term contracts.

    Pure raiding is more of a Russian term, involving proposals you cannot say no to. Apart from the CIS countries it works quite well in many parts of the EU nowadays, provided the corporate registries can be accessed and modified digitally.

    Sometimes it involves coercion of one of the shareholders out of his stake, so that decisions can be made for changing the board and management. This usually comes as an unpleasant surprise to the remaining shareholders.

    Another approach is bribing a notary into confirming that a shareholder was present and legally and willingly sold his stake (usually majority) in the company. The new owner goes to another notary and sells the stake, making another change in the corporate registry. Once this has been repeated once more, the final owner has claim good will (plausible deniability) and takes over the unencumbered real estate first, selling it or taking a load against it, then empties the corporate bank accounts.

    Usually this is when the original owners notice that sth is not right and finds themselves in an extended legal battle, trying to regain control over the assets -.success ratio is 50/50, but funds/cash is often gone for good.

    So I would say yes, you need to study it.
    You also need your own henchmen, bodyguards, a bullet proof vest, lawyers and a few corrupt officials.
    Once that is ready, you can roll it out.
    P.S. Your learning curve can be shortened if you've got friends in the mob.
     
    • Thanks Thanks x 3
  4. Roparadise

    Roparadise BANNED BANNED

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    Ty for mentioning that its leverage buyout/hostile takeovers I was confused why I couldn't find any info about it. Ill be reading a ton of business books,while building up my funds though blackhat IM.

    I wont be focusing on actually corporations to start off with,but small local businesses that might have 10-50 employees,that could be laid off and replace with workers in Eastern EU or India/China.
     
  5. Markbh

    Markbh Regular Member

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    Make sure you pick one that is outsourcable, as for some businesses local personnel is a must.
     
  6. Roparadise

    Roparadise BANNED BANNED

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    I think Im going to have to be getting companies that have alot of workers along the lines of accounting,graphic design,data entry,call centers,writers,web designers etc. I wont be able to outsource the entire company,but if I could find companies that I could post the profit by 30% it would be nice.
     
  7. clopper

    clopper Regular Member

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    Buying a local business has a few disadvantages. Unlike public companies, small mom and pop stores retain and attract clients by being mom and pop. Just like I visit the gas station I do because of the chesty blonde small businesses do well with the familiar face. When you buy it, you're 'Joe', an unknown guy, who people may not like and on top of that mom and pop may not be running the books the way you would. Imagine hiring 2-3 people to replace mom and pop because they worked for a reduced rate since they owned it and knew the tricks of the trade.

    In short, whatever their expenses are, add 20% and a salary before you deduct things and be aware you might have to hire a chesty blonde.
     
  8. Roparadise

    Roparadise BANNED BANNED

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    Not all local business are small mom and pop places, some have many employees that can be replaced with outsource work.
     
  9. partymarty4870

    partymarty4870 Elite Member

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    I come from a land downunder
    I've owned numerous business over the last ten years - and it's not worth the hassle.

    I'm 100% online now.
     
  10. Roparadise

    Roparadise BANNED BANNED

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    Theres alot more money in raiding and acquisitions,then there is in online stuff. I really doubt there will be a person as rich as John D. Rockefeller from doing online things.
     
  11. clopper

    clopper Regular Member

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    A small business not part of a chain is likely sole proprietorship or small member LLC. I'm a small member llc, I could be replaced but imagine what you'd have to pay someone to replace me and retain the personal business relationships. You'd have to pay me well to sign a non compete so I don't start the same company again and steal all of your clients and find some way to find someone as skilled as I am to work for you. Not to toot my own horn, but I'd think you'd do well to take a quote from Steve Jobs "good artists copy, great artists steal". Find a good company, steal their business model and do it better. It saves on acquisition. Icahn plays on a high enough level where it's tough to build and topple huge companies and compete for market share, so he buys them out, etc.

    Thats my take