Response to Tansy_Gold (Original post)
Tue Sep 17, 2013, 06:54 AM
Ghost Dog (13,682 posts)
12. Barclays Is Still Paying for Qatar's Bad 'Advice'
Barclays is off raising $9.2 billion to shore up its capital, and the prospectus has a rather awkward disclosure, which is that British regulators are planning to fine Barclays $79 million because the last time it raised a bunch of capital it maybe lied to shareholders to cover up the bribes it paid to Qatari investors to buy its shares. But that was, like, almost five years ago, so surely there are no hard feelings?
It was not alone in this. If you're a bank and things have gone terribly wrong for you, one thing you might want to do is raise some money by selling stock. This can be hard because everyone tends to know that things have gone wrong for you, but they have trouble knowing how wrong, so their sensible inclination is to assume the worst. Markets for lemons, etc.
One partial way around this problem is to raise a big chunk of money from a single, deep-pocketed investor. That investor gets to do due diligence, look you in the eye, and generally get a better than average sense of your situation. And then you can use him as an foundation to raise public money: "See, we can't be in that bad shape, we raised all this money from Investor X." Many extra points if Investor X is Warren Buffett but, in a pinch, Blackrock or Fairfax or Temasek or even the Qatar Investment Authority will do.
The problem here is that the big investor will want to buy shares below where you want to sell them. For good reasons. One, he's putting in a lot of money and want some sort of volume discount. Two, he's done due diligence and looked you in the eyes. Your eyes are bloodshot and shifty. Why would he trust you with his money unless you give him a good deal? ...
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|Ghost Dog||Sep 2013||#10|
Barclays Is Still Paying for Qatar's Bad 'Advice'
|Ghost Dog||Sep 2013||#12|
|Ghost Dog||Sep 2013||#41|
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