When a company gets bailed out with taxpayer money, why is it not owned by the public now?
In: Economics
Because it is not owned by the general public, but rather by the government, who acts as the major shareholder and can control the company without being too transparent over it. Generally the now major shareholder keeps some people on the board of directors, fire other, nominate new ones, and after a while it will start selling stocks to the market to get rid of most shares. Sometimes the government is able to sell all its shares. Sometimes it is not but eventually gets something like 5% of shares and decides it doesn’t need to intervene anymore.
Because these companies were failing and their shares are now more valuable, the government often “profits” from bailing out these companies.
Latest Answers