How does selling rights issues work in practice?
Do you simply get call options you can sell on an options exchange? No, you don't get call options that you can sell on an options exchange. Rather, you get rights that you can (generally) sell on the stock exchange. The right issue is in essence a call option – in that it behaves like one, but it is not considered a standardized option contract. is there a special exchange where such rights issues are traded? No. It will normally be done on the stock exchange.
"With the second example, if you continue to read on you will see that although directors must try and maximise shareholders wealth. That precedence doesn't change however the interpretation of the actions and whether they maximise shareholders wealth does. For example giving money to charity with regards to the Doge v. Ford case would probably have been blocked on the grounds that it decreases shareholder wealth, but later cases such as A. P. Smith Manufacturing Co. v. Barlow say that donations can increase shareholders wealth in the long run. So it gives a broader coverage of the actions deemed to increase shareholder wealth.  The second is related to short term vs long term wealth but part of the reason for it was due to the inability of Paramount to prove that the value increase for shareholders in the long run from selling to Viacom rather than QVC would be larger than the difference between the two offers, which was 1.3 billion. Then there is also the issue of shareholders rights and the companys ability to block shareholders from selling to whomever they want. So as I said it's related, but the issue isn't solely and simply about short term vs long term wealth.  Both examples are kind of weak as in the first, well the issue doesn't really exist in the present day as previous case law has broadened the definition of actions which increase shareholder wealth, and in the second, short term vs long term value is related, but mostly tagging along with a larger issue. Your original statement was ""in matters of cost vs. quality I'd expect publicly traded companies to prioritize short-term shareholder profit (or be sued by said shareholders.)""  Are there any examples where shareholders have sued simply because they wanted better short term performance over long term performance?" A practical issue is that insider trading transfers wealth from most investors to the few insiders. If this were permitted, non-insiders would rarely make any money, and they'd stop investing. That would then defeat the purpose of the capital markets which is to attract capital. A moral issue is that managers and operators of a company should act in shareholders' interests. Insider trading directly takes money from other shareholders and transfers it to the insider. It's a nasty conflict of interest (and would allow any CEO of a public company to make ton of money quickly, regardless of their job performance). In short, shareholders and management should succeed or suffer together, so their interests are as aligned as possible and managers have the proper incentives. I don't think you've worked in sales. The high paying sales jobs usually have to compete in a competitive bid process. Companies don't just select vendors. They are mandated to create a competitive process to rule out what you're talking about. Of course, there are ways around this, but the norm is for a competitive sales process. How hard would it be to say that a company cannot pay licensing fees to a company that it owns an X% stake in (and/or owns an X% stake of it, to cover subsidiary to parent movement?   .   Alternatively, such transactions could be taxed as if they were a purchase between the two companies, and taxed as such.  The percentage could be set high enough so as to not discourage joint ventures, but low enough to force a company to sacrifice a major chunk of the money to another unowned company if they try to abuse it. "So item 1  The two investors leading the suit say ""it's because we want lots of control"" and sue founder.  The standard share holders want equal voting - as would I.  Founder appoints two new board members to ensure this happens.  Item 2 the suit:  The suit is to remove the ability to appoint new board members from the founder correct?  After he has appointed two new ones to implement the changes the other shareholders want correct?  But somehow the suit is ""on behalf"" of the other share holders?  Do I have you explanation right?" "When an IPO happens, the buyers pay some price (let's say $20 per share) and the seller (the company) receives a different price ($18.60).  Who paid the commission? Well, the commission caused a spread between buyer and seller.  It doesn't matter who technically pays the commission because it costs both parties.  In an IPO, the company technically pays the commission, but they use buyers' money to do it and the buyer must pay more than he/she would if there was no commission. The same thing happens when you buy a home.  Technically the seller pays both realtors' commissions but it came from money the buyer gave the seller and the commissions pushed up the price, so didn't the buyer pay the commission?  They both did. The second paragraph suggests that if the investment bankers act as a simple broker, buying public securities instead of newly issued shares for their clients, then the commissions will be much lower.  Obviously.  I wonder if this is really the right interpretation, though, as no broker charges 4% to a large client for this service.  I would need more context to be sure that's what's meant. The gyst is that IPOs generate a lot of money for the investment bankers who act as intermediaries.  If you are participating in the transaction, that money is in some way coming out of your pocket, even if it doesn't show up as a ""brokerage fee"" on your statement." Discrepancies between what the book value is reported as and what they'd fetch if sold on the open market. Legal disputes in court. "Shares sold to private investors are sold using private contracts and do not adhere to the same level of strict regulations as publicly traded shares. You may have different classes of shares in the company with different strings attached to them, depending on the deals made with the investors at the time. Since public cannot negotiate, the IPO prospectus is in fact the investment contract between the company and the public, and the requirements to what the company can put there are much stricter than private sales. Bob may not be able to sell his ""special"" stocks on the public exchange, as the IPO specifies which class of stock is being listed for trading, and Bob's is not the same class. He can sell it on the OTC market, which is less regulated, and then the buyer has to do his due diligence. Yes, OTC-sold stocks may have strings attached to them (for example a buy back option at a preset time and price)." I believe, I could be wrong, it has been a long day. By exercising this right you have the right to purchase the equivalent of their current share.  Eg. Someone owns 50 of 100 shares. and the company does a rights offering and is expanding the shares to 200. That person has first right to purchase 50 more shares to keep his share from being diluted. Shares are partial ownership of the company. A company can issue (not create) more of the shares it owns at any time, to anyone, at any price -- subject to antitrust and similar regulations. If they wanted to, for example, flat-out give 10% of their retained interest to charity, they could do so. It shouldn't substantially affect the stock's trading for others unless there's a completely irrational demand for shares. "As you pointed out in reference to cost-cutting, fiduciary lawsuits come out when things go wrong. When directors successfully increase stock value, everyone including shareholders is happy.   I'm not sure exactly where the best place is to look for such cases, but here's what my google-fu yielded:  * [Example 1](http://www.nytimes.com/1993/11/25/business/the-media-business-excerpts-from-ruling-in-paramount-case.html): Paramount is sold to Viacom at a lower price than QVC's offer, shareholders sue. Paramount claims they were looking out for long-term but shareholders sued them for screwing them out of maximal share value.  * [Example 2](http://www.professorbainbridge.com/professorbainbridgecom/2012/05/case-law-on-the-fiduciary-duty-of-directors-to-maximize-the-wealth-of-corporate-shareholders.html): Dodge v. Ford Motor Co, Ford had a majority share in his company and wanted to stop paying dividends to shareholders so he could expand his business. At trial Ford ""testified to his belief that the company made too much money and had an obligation to benefit the public and the firm’s workers and customers."" The court disagreed, as his motor company was set up for profit, not charity. Ford was ordered to resume paying dividends.  Interestingly I found many more lawsuits where corporations sacrificed long-term for short-term. It seems once incorporated this is where the internal incentives and pressures lead many managers, lawsuits are merely one of these pressures." If you want to use the original material then you will, essentially, need to negotiate for it.  You are in ugly, muddy territory.  Don't expect a simple, easy legal solution to exist; civil courts exist partly to help navigate these kinds of quagmires.  A negotiated solution would, on the other hand, clean everything up nicely.  Do you have your copyright ducks in a row?  If the contract does not stipulate otherwise, the creator will still maintain reproduction and moral copyright to the work; i.e., the creator will continue to own the copyrights to the work and you'll be unable to license or sell them to a third party. In general, just make sure you are on the same page as them. For example, are they supplying the antlers at cost? If their product manager asks for too large a cut of the profits of the product line, they may decide it makes sense to sell the antler to the side business at a higher markup. Or they may find someone else willing to take the product manager job for a lower ownership stake.  Either way, good luck and be sure to get your agreement down on paper somewhere. I believe the appropriate recourse in this scenario is to bring a court case for breach of contract.   The 1p repricing issue has been admitted as an error out of scope of the purpose of the software. Not exactly. From OP's X-post, this appears like textbook tortious interference.  If it were me, I'd demonstrate to the customer why they are getting a better deal and at the same time, I'd have my attorney send a C&amp;D to the offending competitor.