A way for companies to get around the otherwise-needed shareholder approval when creating a new class of preferred stock. Companies must edit their articles of incorporation to create new, unissued shares of preferred stock.
You may be thinking: why would a company want to go around their shareholders’ backs like that? If someone is trying to take over a public company via a hostile bid, a company may issue blank check preferred stock to try to prevent the takeover from happening. By creating new shares, they can swing voting power, protecting the company from decisions they don’t like. Checkmate.
Related or Semi-related Video
Finance: What is a Business Plan?6 Views
Finance allah shmoop what is a business plan Well think
of it like blueprints for building a home or a
directions for toll house cookie baking or the process for
howto you know get pregnant let's get down to business
time anyway A business plan is just the game day
strategy for how your little garage startup will grow to
someday be a google or facebook or even little old
shop You'll describe the product like a pill that cures
cancer Yep some products are easy to describe Like if
you actually had a pill that cures cancer while you'd
pretty much be done you could have a one page
business plan that just says i have a pill that
cures cancer Your eight hundred seventy six people on whom
it has worked Now give me billions of dollars and
a nobel prize night and you'd be done But if
you only had a flying car well then you describe
it well How much weight it khun carrie how fast
and far it goes how it navigates and avoids crashes
and how it recharges and stuff like that That's the
product then there's the place or distribution Like how you
get the car out to the masses you want to
sell it to like are you partnering and paying ford
to stock it in their showrooms Are you leveraging starbucks
places teo You know showcase it Get buzzed while you
buzz about that Or do you just have a mail
order website Customers pay with a credit card and a
delivery agent applies it to your home You know kind
of like tesla All right Next up promotion Like how
do you market your product Or is it just so
cool that the press writes about it endlessly fawning and
all that digital ink is free Well if the products
all over the covers of the new york times and
yusa today well you're kind of marketed everyone in the
country knows about it All right Well then there are
the finances Like how much does a unit cost So
this is all about price How much is the factory
that stamps out the carriage The blades of the battery
Well if you sell a hundred units a month you
make what What should they be Priced at fifty grand
Each one hundred two hundred fifty grand if you sell
Ten thousand a month Well how much do you make
How much capital do you need thio field all that
get through your first two years and then how much
do you need to raise beyond those first two years
to get to break even profitability and and so on
Is there a ny po in the future Yeah yeah
what about that That should be in the plan Well
there's a lot to figure out a lot of work
to put together a business plan So you better get 00:02:27.7 --> [endTime] uh you know busy No
Up Next
What is a Blank Check Company? A Blank Check Company is a company that is just starting out. They are often created as new penny stocks that presen...
What is insider trading and the Securities Fraud Enforcement Act of 1988? It's nothing too complicated, if this minute long video is any indication.
What's the SEC? Easy. Seals Eating Candy. Or maybe Silly Elephants Canoodling? We can never remember. Guess it's time to watch this video and refre...
What is Adjustable Rate Preferred Stock? Adjustable rate preferred stocks pay dividends that are based on interest rates. Usually these are the rat...