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Finance: What Does It Mean to be Acting in Concert? 2 Views


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Description:

What does it mean to be acting in concert? Acting in concert describes more than one party partaking in the same investment opportunity. Usually this happens when a company is bought and the purchase is split equally among multiple investors.

Language:
English Language

Transcript

00:00

Finance - a la shmoop what does it mean to be acting in concert....George

00:08

Clooney, Brad Pitt, Emma Stone and Chloe Moretz are all on stage to perform a [Brad, George, Emma and Chloe on stage]

00:12

scene from The Merry Wives of Windsor as they are underscored by sweet violin

00:17

music yeah okay that's not really what acting in concert is but it'd be kind of

00:21

cool to see right it's actually not that far off the [Audience clapping]

00:23

financial definition though and it is usually applied to an oceans 10 through

00:27

12 kind of scenario where a group of investors is trying to take over a [Investors taking over a company building]

00:31

company rather than rip off a casino that is it takes a certain number of

00:36

shares to elect a board member remember but one investor may not have

00:41

enough dough to buy those shares outright in the market or the company [Investor reaches for money in pocket]

00:44

itself might have a poison pill clause such that if any one investor owns more

00:48

than a set of maximum percentage of the company like 10% or 15% is max well then

00:53

that investor has to get permission from the company to own more shares or the

00:59

company prints something like a hundred new shares for every one that the [Printer printing new shares]

01:03

company had previously diluting itself into oblivion it's the notion of that

01:07

poison in that pill so acting in concert might involve a half dozen groups each [Groups of people investing]

01:13

investing in the takeover of target company X with one owning 3%

01:17

another owning 7% another owning 9.235%

01:21

so that when it comes time to cast votes to elect that new board [Woman gets up to cast vote]

01:25

member well the company then looks a whole lot different

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