# Can you buy control of a company by buying stock? **URL:** \ **Category:** Factual Questions\ **Created:** [October 24, 2002, 6:17pm UTC](https://boards.straightdope.com/t/can-you-buy-control-of-a-company-by-buying-stock/133723 "2002-10-24T18:17:46Z")\ **Posts on this page:** 4\ **Page:** 2
**Author:** ![jiHymas](https://avatars.discourse-cdn.com/v4/letter/j/439d5e/32.png) [@jiHymas](https://boards.straightdope.com/u/jiHymas)\ **Post date:** [October 25, 2002, 5:54pm UTC](https://boards.straightdope.com/t/can-you-buy-control-of-a-company-by-buying-stock/133723/21 "2002-10-25T17:54:56Z")
> [@](#): > > _Originally posted by elf6c_ > **The main hinderence will be litigation and Federal Securities Law requirements regarding tender offers and M&A. The these costs to the acquiror are very high. Modern M&A is not a game for the faint hearted.** [nitpick]Most of the problems cited have to do with the acquisition of the shares, not the concept of control once they are bought. But yes, there is more to taking over Microsoft than simply writing a cheque for umpteen billion dollars.[/nitpick] ---
**Author:** ![kniz](https://avatars.discourse-cdn.com/v4/letter/k/c37758/32.png) [@kniz](https://boards.straightdope.com/u/kniz)\ **Post date:** [October 25, 2002, 10:04pm UTC](https://boards.straightdope.com/t/can-you-buy-control-of-a-company-by-buying-stock/133723/22 "2002-10-25T22:04:48Z")
> [@](#): > > \*Originally posted by PhilAlex \* > \*\*PS: Even if you have 51% of the votes, you still have to fight your way on the board. If they don’t want you there, you’re in for a fight. > \*\* This is not true. You own 51% of the votes and you control the board. If someone has 25% of the remaining stock, it would be wise to put him on the board, unless you want trouble. Billy Rose owned 3% of AT&T back in the 60’s and he was on the board, because he owned more stock than anyone else. Ross Perot sold his company to General Motors for GM stock. He didn’t have 51%, but they had to put him on the board. He caused so much trouble that they bought him out in cash. ---
**Author:** ![Max\_Torque](https://avatars.discourse-cdn.com/v4/letter/m/e9bcb4/32.png) [@Max\_Torque](https://boards.straightdope.com/u/Max_Torque)\ **Post date:** [October 25, 2002, 10:30pm UTC](https://boards.straightdope.com/t/can-you-buy-control-of-a-company-by-buying-stock/133723/23 "2002-10-25T22:30:03Z")
Aw, c’mon, let’s explain cumulative voting! Cumulative voting is an alternative to straight voting. In a straight voting system, each share gets one vote for each director position, and a shareholder may vote once per share for each open position. In that system, someone owning more than 50% of the shares can elect whoever s/he wants to every position. Cumulative voting is the alternative, and it works like this: each share has a number of votes equal to the number of directors to be elected, but those votes can be “pooled” into a single election, or spread among the elections however the shareholder wishes. Here’s the magic formula: x = [(s \*d)/(D+1)] +1 where x is the number of shares required to elect directors, s is the number of shares represented at the meeting, d is the number of directors it is desired to direct, and D is the total number of director positions to be elected. Example: suppose there are 1000 shares at a meeting at which 4 directors are to be elected. To elect one director, a minority group would need to gather 201 shares. With that number of shares, the group would have 804 votes, all of which could be case for one candidate. The remaining shares would have 3196 votes, or 799 for each candidate. Thus, the minority is assured of electing one director, with only about 20% of the represented shares. Funky, ain’t it? ---
**Author:** ![Max\_Torque](https://avatars.discourse-cdn.com/v4/letter/m/e9bcb4/32.png) [@Max\_Torque](https://boards.straightdope.com/u/Max_Torque)\ **Post date:** [October 25, 2002, 10:33pm UTC](https://boards.straightdope.com/t/can-you-buy-control-of-a-company-by-buying-stock/133723/24 "2002-10-25T22:33:22Z")
Pardon me, that should be “all of which could be **cast** for one candidate.” [Previous page](https://boards.straightdope.com/t/can-you-buy-control-of-a-company-by-buying-stock/133723.md?page=1)