If you buy out all the outstanding shares of a pink sheet listed company, do you control the company (much like when an NYSE-listed stock is bought out)?
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6Be sure you understand total shares vs shares outstanding. Total float may be 100 million, but only 10 million are trading.– JTP - Apologise to Monica ♦Commented Jul 11, 2013 at 20:28
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2only need to own over 50%– CQMCommented Jul 11, 2013 at 20:58
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4@CQM ... of the voting shares.– Chris W. ReaCommented Jul 11, 2013 at 21:08
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5 Answers
Depends on the structure of the company and what shares are outstanding. If the pink sheet stock has no voting power then buying all that stock doesn't get you any control at all. On the other hand, if the outstanding shares only represent 20% of the company's overall shares, then buying all the shares isn't likely enough to have a controlling interest.
Thus, you'll have to dig into the details. If you want an example of where I'd have my doubts, look at Nestle's stock which has the ticker of NSRGY. There can be companies that are structured with stock on multiple exchanges that can also be a challenge at times. There is also something to be said if you own enough stock in a company that this has to be disclosed to the SEC when you buy more.
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Nestle is a good example, since it's not an American company, so you'll run into regulatory issues in multiple national jurisdictions. Commented Jul 12, 2013 at 2:21
Sure. No-one promises that all the outstanding stocks are ever for sale, but if you get them all - you get them all, what marketplace you used for that doesn't really matter.
answered Jul 11, 2013 at 18:58
I suggest you contact head of the company your are interested in, ask if he or she owns a controlling interest. If so offer to buy him out.
Yes, of course, if you own all the shares then you will control the company.
A better question is whether this it is really possible for you to buy all the shares, and the answer to that is likely 'no,' or at least not the way you are probably thinking about it.
You might see a 'price' of a share of stock (pink sheet or otherwise), but this isn't an offer to sell ALL the shares for this price, it's only the LOWEST offer to sell a SMALL NUMBER of shares. Beyond that, as you continue purchasing shares, you will have to work your way up the offers to progressively higher and higher prices. As you approach 50%, probably that price will become very high indeed. All the while the 'stock price' shown on the ticker will be going up. You will run out of money or desire at some point well before you own a controlling interest. Congrats, you have pumped the stock!
You might then think you can make a whole bunch of money by then selling all the stock you accumulated by selling at the new, much higher price. Sadly, you will have exactly the same problem in reverse: The price you see only reflects the highest offer from the buyers, and as you sell shares you will have to work your way back down all the buyers taking lower and lower prices.
No, you can't buy it out. 'Buyout' implies that you gain control of the company. No matter how many shares you buy on the open market, this does not immediately change the board of directors.
If the BoD doesn't think you should have control, they can feed you a poison pill.
answered Aug 30, 2021 at 15:46
