Borrowed money Quote by Michael Hudson
“When you buy enough stocks to give you control of a target company, that's called mergers and acquisitions or corporate raiding. Hedge funds have been doing this, as well as corporate financial managers. With borrowed money you can take over or raid a foreign company too. So, you're having a monopolistic consolidation process that's pushed up the market, because in order to buy a company or arrange a merger, you have to offer more than the going stock-market price. You have to convince existing holders of a stock to sell out to you by paying them more than they'd otherwise get.”
About This Quote
Source Book: Kicking Away the Ladder by Michael Hudson, 2002
Acquiring a company by buying enough shares, often using debt, creates concentration and can inflate market prices.
In simple terms: Buying shares to control a firm leads to market concentration.
Key Takeaway
Beware of leveraged takeovers that distort markets.
Themes
finance
corporate
market
consolidation
Mood
critical
concerned
Type
economic
regulatory
When to use this quote
- investment strategy
- corporate governance
- regulatory oversight
- shareholder activism
Key Concepts
leveraged buyouts
hostile takeovers
market manipulation
Questions to Reflect On
- What are the long‑term effects of market concentration?
- How can regulators balance efficiency and competition?
A Different Perspective
Such tactics can increase debt risk and reduce competition.
