Shane Posted January 9, 2013 Share Posted January 9, 2013 I've read statements that WEB promises the companies he purchases that he will never sell them. Is this the case with all of his operating divisions? I ask because I wonder if 20 years from now, after WEB is gone, if management becomes weak can the conglomerate be split up to give shareholders a pick of the assets they want to own? Link to comment Share on other sites More sharing options...
twacowfca Posted January 9, 2013 Share Posted January 9, 2013 I've read statements that WEB promises the companies he purchases that he will never sell them. Is this the case with all of his operating divisions? I ask because I wonder if 20 years from now, after WEB is gone, if management becomes weak can the conglomerate be split up to give shareholders a pick of the assets they want to own? A company can change a policy whenever it wants, but why would they want to change this one? There might be some short term advantage in "passing a bad penny to another", as Lord Keynes said, but why would a company that is unique in having built a reputation for being a buyer and then a loving owner of a dairy herd of prized milk cows turn "old bossie" into cat food as soon as soon as she begins to give less milk? Link to comment Share on other sites More sharing options...
Partner24 Posted January 9, 2013 Share Posted January 9, 2013 Because Wall Street is short term oriented. Link to comment Share on other sites More sharing options...
petec Posted January 9, 2013 Share Posted January 9, 2013 I think this is a key question actually. *If management becomes weak* are the key words, in other words if something goes wrong with the culture so that either a) the businesses are not being so well run or b) the capital they generate is not being well allocated, it is important to know that the conglomerate can be dismantled. Link to comment Share on other sites More sharing options...
Kraven Posted January 9, 2013 Share Posted January 9, 2013 This falls in the category of unnecessary worrying. Link to comment Share on other sites More sharing options...
Shane Posted January 10, 2013 Author Share Posted January 10, 2013 Yes for an investment today it is unnecessary, sure. twacowfca - Why? As businesses decline it is my understanding that WEB will run off as much cash as possible and reinvest it in new businesses, however, what if the capital allocator is terrible? Then this strategy breaks down and its best to just seperate the conglomerate. So I think it is pretty logical to want to dismantle the company should this happen. I am thinking decades from now. Link to comment Share on other sites More sharing options...
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