Today’s (24 April 2002) LA Times has this story about the “smashing success” of an AOL merger of a while ago. http://www.latimes.com/business/la-042402losses.story
It seems to me that the stockholders ought to be able to recover some of their losses from the executives who caused them. After all, don’t “free market” advocates preach that “personal responsibility” is important in life?
Well I suppose the argument would be that investors have to take personal responsibility for investing in a company. It’s neat how personal responsibility can be twisted to mean anything.
It’s not just that the investors decided to put their money into AOL-TW, but that the TW shareholders approved the merger when everybody already knew that the Internet bubble had already burst and AOL was on the verge of drowning in a sea of red ink.
That vote will go down in history as one of the top 5 all time dumbest shareholder votes. I can’t even think of reason why it shouldn’t be number 1.
It also doesn’t help that the company is now run by the same idiots who screwed over the investors in an amusement park so badly that they had the largest judgement in GA state history slapped against them. These guys don’t understand the consequences of their actions too well.
Well, a small consolation is that every single one of their stock options is now totally worthless. Of course, they still make 100x what I make…
I suppose you could make that argument. You could, that is, if you equate taking a huge salary in order to manage a company from a combined stock value of $290 billion two years ago to $85 billion today, to buying stock in a reputedly good company on an allegedly well managed stock exchange based on information from allegedly reputable brokers or allegedly expert stock analysts.
I guess you could equate those two, if your reason has been addled by conservative propaganda.