Monday, November 26, 2012
Company ownership structure can be riskier than you think
Analyzing a company ownership structure is very important in investment decisions and sometimes do not considering it can be very risky. The perfect example when a government is a stake holder of a company and how sometimes they make successful company unsuccessful: Petrobas is a Brazilian state owned oil company, the government is suffocating the company profitability by drilling expensive oil fields and the same time suppresses prices. The government uses this company to support their aims, and that the private shareholders are never going to see the full profit potential of the company. A pure economic return will never be achieved, as the government sees the company as a key revenue steam for state budgets.
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