Electronic Arts is going private after a deal was finalized today, valued at about $55 billion. The largest leveraged buyout in history. The Saudi sovereign wealth fund partnered with Jared Kushner's PE firm on the deal. $210 per share.

How's that work being already public?

Public -> Private
Private -> Public

EA just did the first one.

What happens to shares owned by people though?

I am curious to know what happens to shareholders in taxable accounts whenever a buyout like this happens (25% wouldn't cover short-term gains for many tax brackets).

deadbq03 said:

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I am curious to know what happens to shareholders in taxable accounts whenever a buyout like this happens (25% wouldn't cover short-term gains for many tax brackets).

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Not sure I understand your question. It's like any other stock and depends on what your cost basis is. The closing share price was $168 before the announced sale and shareholders are getting $210 per share which is the 25% premium. As an example, EA was as low as $116 earlier this year so if you bought in at $116 and then got a 25% premium on the last closing price you made almost $100 per share.

flashplayer said:

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A lot of what they have done is definitely using their position to gain wealth. I won't deny that. But I would like for you to name the last president or long term congressional rep / Senator who did not do this. I'll hang up and wait.

On its face, EA can be sold out to anyone they want. This offer met the mark apparently. Probably nothing illegal about it. Fine to question it from an ethical standpoint.

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Thanks! Especially for the honesty. I don't really have an axe to grind, here, but want to see if people can defend this stuff as anything but corruption.

The bolded part above is the "whataboutism" response - the "everyone does it" excuse. I don't buy this, and I'd suggest that there were and are politicians of integrity that while you may not agree with them, they weren't there to skim off the top (both Bushes, Carter, Reagan, Ron Paul, Joe Lieberman, etc.).

I have thought that wealthy people who run for office (such as Trump, Pelosi, Bloomberg, Pritzker, etc.) ought to be more immune to corruption, but sometimes those are the worst offenders. I just don't get it. With Trump, I suspect it's more a lust for power, and the scorecard he uses is net worth, just like when he was in business.

I don't specifically have an issue with the EA transaction (and as a poster noted above, it's not really a strategically important segment), but of all the firms in the world, the Saudis selected the one they did for a reason.

flashplayer said:

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Probably nothing illegal about it. Fine to question it from an ethical standpoint.

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Meant to address this, too: Yep - I guess it was technically legal for Hunter Biden to throw some paint on a canvas and sell it for $1 million. That doesn't make it right, but it does make it corruption.

YouBet said:

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I bleed maroon said:

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flashplayer said:

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A lot of what they have done is definitely using their position to gain wealth. I won't deny that. But I would like for you to name the last president or long term congressional rep / Senator who did not do this. I'll hang up and wait.

On its face, EA can be sold out to anyone they want. This offer met the mark apparently. Probably nothing illegal about it. Fine to question it from an ethical standpoint.

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Thanks! Especially for the honesty. I don't really have an axe to grind, here, but want to see if people can defend this stuff as anything but corruption.

The bolded part above is the "whataboutism" response - the "everyone does it" excuse. I don't buy this, and I'd suggest that there were and are politicians of integrity that while you may not agree with them, they weren't there to skim off the top (both Bushes, Carter, Reagan, Ron Paul, Joe Lieberman, etc.).

I have thought that wealthy people who run for office (such as Trump, Pelosi, Bloomberg, Pritzker, etc.) ought to be more immune to corruption, but sometimes those are the worst offenders. I just don't get it. With Trump, I suspect it's more a lust for power, and the scorecard he uses is net worth, just like when he was in business.

I don't specifically have an issue with the EA transaction (and as a poster noted above, it's not really a strategically important segment), but of all the firms in the world, the Saudis selected the one they did for a reason.

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The Saudi prince is a big time gamer and this is the third gaming company of which their fund now has partial ownership. Just pointing this out to clarify this isn't necessarily some out of the blue play by the Saudis in collusion with the Trumps. They already had a desire/strategy to own gaming companies within their fund.

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Agree with this - in fact, I don't really blame the Saudis much at all. This appears to me to be a Trump family instigated cozying up to the royal family that's been in the works for years. In the old days, some politicians would shy away from even the appearance of corruption. This regime openly embraces opportunities for people to challenge them, apparently to convince people to become numb to the repeated instances.

I bleed maroon said:

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deadbq03 said:

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I am curious to know what happens to shareholders in taxable accounts whenever a buyout like this happens (25% wouldn't cover short-term gains for many tax brackets).

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Of course it could. If 25% represents your total gain, you're only paying tax on the gain portion, not the principal.

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Yeah I'm not sure why I bothered bringing that up. What I meant to say is that it'd be a shame if you're forced into taking a taxable gain (period) and if you are, the 25% may not be enough to offset.

As opposed to say an all stock acquisition where you can basically defer the taxes.

I bleed maroon said:

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flashplayer said:

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A lot of what they have done is definitely using their position to gain wealth. I won't deny that. But I would like for you to name the last president or long term congressional rep / Senator who did not do this. I'll hang up and wait.

On its face, EA can be sold out to anyone they want. This offer met the mark apparently. Probably nothing illegal about it. Fine to question it from an ethical standpoint.

---

Thanks! Especially for the honesty. I don't really have an axe to grind, here, but want to see if people can defend this stuff as anything but corruption.

The bolded part above is the "whataboutism" response - the "everyone does it" excuse. I don't buy this, and I'd suggest that there were and are politicians of integrity that while you may not agree with them, they weren't there to skim off the top (both Bushes, Carter, Reagan, Ron Paul, Joe Lieberman, etc.).

I have thought that wealthy people who run for office (such as Trump, Pelosi, Bloomberg, Pritzker, etc.) ought to be more immune to corruption, but sometimes those are the worst offenders. I just don't get it. With Trump, I suspect it's more a lust for power, and the scorecard he uses is net worth, just like when he was in business.

I don't specifically have an issue with the EA transaction (and as a poster noted above, it's not really a strategically important segment), but of all the firms in the world, the Saudis selected the one they did for a reason.

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Both Bush's? Are you kidding? They 100% got in on propping up oil and defense with all their family friends. That was all out in the open and very obvious even before hindsight. Their wealth increased substantially after both presidencies.

Reagan and Carter were before my time when I was paying attention to politics. A google search suggests Paul's net worth more than doubled from 08-12. I don't doubt there are a few exceptions to the rule. The rule is, the side in power usually abuses it for financial gain. This has been true throughout human history and is unlikely to ever fundamentally change. Hence why our constitution sought to at least spread the grift out among many instead of a concentrated few.

When you make it sound like its only Trump, Hunter Biden, and Pelosi it does sound like you have an axe to grind. Power corrupts. Absolute power corrupts absolutely.

To keep it thread related, I don't know whether there's some obvious impropriety here or not. The Saudis are rich. EA is one of if not the most successful game franchise of all time. If one wants to be taken private by the other that is between them. Is there no risk involved for them or Kushner? Will Trump announce that the feds are going to invest billions into video games? I guess we will see.

Don't like the Bushes, I see.

I think you make some very good points, and I'm probably an idealist that still believes you enter politics for the public good. I guess my bottom line is that there are degrees of corruption. Sure, the Bushes came from the oil patch, and took care of their friends, indirectly, BUT to my knowledge, they didn't form companies to directly have others contribute to to curry favor with them. But GW Bush (and Clinton and Obama, for that matter) were quieter about this type of stuff, and seemed to retain a sense of shame (well, maybe not Bill :-D ). The Biden family and the Trump clan just seem so open and brazen about the abuse that it kinda sickens me. Maybe it's just me.

Like I said, I have no real issue with the EA deal, but I will let you know that the current transactional and advisory fees are where the money is at, not future deregulating or investing in gaming, and Kushner already has most of those many, many millions in his pocket. Same with Hunter Biden with Burisma / Ukraine. Also, on Ron Paul, guess what - my net worth doubled between 08-12, too. There was a decent stock market rally at that time. I'm sure Nancy also did well too, at that time.

I have no axe to grind, just disappointed. It's OK to expect the best of our politicians, in my view.

Do I think the Trump's are getting richer off dad being President? Absolutely. And yes I find it reprehensible. But whataboutism matters unfortunately and I find it far more disgusting that the Clintons, Obamas and Bidens all went to DC in the middle class and left worth tens or hundreds of millions of dollars. Worse still none of them have any real world accomplishments to speak of so all of that wealth must have been accumulated while in elected office. Trump at least made his billions in the private sector.

Did you know that in March 2016 there were not one, not two but three FBI offices investigating Hillary Clinton for pay-for-play schemes with foreign governments when she was Secretary of State? She was openly for sale which certainly helps explain the Trump-Russia hoax. Had to divert our attention. They have to be the most corrupt family in American political history.

To be clear I find all of it disgusting and if I were king for a day I would repeal all of 1913 just to see where that landed us. Politics has always been corrupt but the three massive structural changes from that year opened the door to what we see today with the Senate being bought and paid for, the federal government being an all powerful completely unaccountable bureaucracy and the whole thing being funded by an unlimited supply of money.

Once you realize they all do it then you just have to vote for the thief that's going to run the government the way that's most closely aligned with your interests. The potentially clean former presidents you listed are all dead except for W and he's been gone for almost 20 years. We haven't had a true statesman since HW and I don't think we have another in our immediate future. Grift is the name of the game now with the vultures cleaning the carcass. It is what it is.

Really don't understand the Trump angle. SA has been buying up video game combines for a decade now. How does this benefit Trump or something?

Yukon Cornelius said:

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Really don't understand the Trump angle. SA has been buying up video game combines for a decade now. How does this benefit Trump or something?

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Jared Kushner's firm is partnering with the Saudi's on this EA deal. Kushner is married to Donald Trump's daughter, Ivanka, and Kushner was also senior advisor to Trump in his first term.

Another thing of note, the 2 biggest sports that Saudi has tried to buy their influence in to help with sportswashing is soccer and F1. EA currently has the worlds most popular soccer game, which is also annually one of the top selling video games, as well as the exclusive video game rights to F1. One question ive seen gamers ask is with this new ownership will the studios that make games with story lines and characters still have creative freedom or be restricted by Saudi morals.

EA was a garbage company anyways

Saudis have been trying to break into gaming for a while now

Yukon Cornelius said:

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Few thoughts. Kushner did work lobbying/influence peddling with Saudi Arabia extensively during the first term. Maybe they trust him his political influence over JPMorgan? Maybe his fees are money better spent (and more direct)?

And why is it inherently corruption for SA to buy EA? SA for whatever reason has been very interested in buying video game companies for some time now. We've been over this - no issue with the Saudis wanting to buy a video game company...

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See my comments above. All these competing firms tout their political influence, often hiring former politicians from a party in power due to their perceived ability to influence public policy. The Trump dynasty is just cutting out the middleman in a brazen way to enrich themselves in an unprecedented way regardless of potential blowback at the perceived impropriety. Smart and lucrative business-wise, sketchy politically. It's unethical on the face of it.

I have some experience in this space, and have seen this stuff firsthand.

Hope that helps.

Quote:

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Once you realize they all do it then you just have to vote for the thief that's going to run the government the way that's most closely aligned with your interests.

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Exactly where we are and what we've had to settle on. It sucks but that's reality. You just have to give in to the fact that anyone going to Washington is going to walk away at the end of their term mega rich. It's part of it and why people run for office. It's not about service unless you are coming to the game already rich which is why I give at least a little leeway to the Bush's although they ultimately disappointed in other areas.

I don't think Trump cares about the money other than just proving a point and using it to stick it to people who come after him.

Look at the Pelosi, Ilhan Omar, and Crenshaw. We have actual sites set up to follow Pelosi and Crenshaw's trading because they are massive insider traders who have gotten rich while elected. Everyone knows it; yet no one does anything about it.

To her credit (shockingly), AOC, in the past, has actually publicly advocated that Congress critters should not be allowed to trade. I'm going to assume at this point though she has jettisoned that belief since she is now on the POTUS list for 2028.

Seems like free market at work

Yukon Cornelius said:

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Seems like free market at work

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Ahhh - the old "opposites" comeback. I think you know that.

True free market would have been blind proposals sent to the Saudis with experience, qualifications, and direct expertise as the rationale for which firm to hire. We all "know" that the decision would have been different without the direct political tie-in of the "winner".

Corruption. It's OK to admit it. Everybody does it, right?