From a logistical point of view, can MIT sell Bose, even if doesn't have any seats on the board? Typically, a struggling company either files for Chapter 7 or 11, or find a buyer for more investment right? What can Bose do, if it continues to lose money?
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With the recent sale of Bose Professional division to a private-equity firm, this topic is interesting once again. The apparent underperformance of the Consumer Products division for the past decade or so was largely offset by the profit of the Pro and Automotive divisions. It would appear that the current strategy is to raise cash by selling a profitable division like Bose Pro, allowing the current management team to keeping trying to succeed in the consumer products space.
In the end, I wonder what Dr. Bose would have preferred. When "The Gift" was made to MIT, employees were told that Dr. Bose set up the trust (and MIT's role in ownership) with the intent of allowing the company to continue as a private company for as long as it could meet the tenets of the company's Guiding Principles (which includes Growth and Financial Viability). Yes, the company can continue trying to compete while selling assets to bolster operating cash, but its value to MIT is diminishing as the company shrinks and keeps falling behind its competitors. Did Dr. Bose envision a scenario where "The Gift" was bled off to private equity firms a chunk at a time (along with the use of his name), leaving MIT with less to show for it?
This is not up MIT, as "The Gift" was granted with no say about how the company was run. It's up to the trustees, which includes the Chairman of the Board.
Dr. B wanted to preserve the culture from outside influence. Ionically it degenerated from top down inside.
It seems the special purpose trust has a very low bar for managements acceptable performance.
Non-performance under the terms of the special purpose trust can lead to its board of directors moving to somehow dissolve Bose. This was driven home in late 2018, ahead of the big 2019 layoffs, by the now ex-CEO at several town halls. Not sell, "dissolve", somehow ceasing to exist. The mechanics of "dissolve" was not broken down further, such as, who gets the monetary result of dissolution. MIT? A few at the top of Bose? Family?
It is very clear that while "selling Bose" in the traditional sense of selling a company whole is not allowed, selling parts of Bose - organizations, divisions, business units, assets (e.g., plants, buildings, etc.), along with people associated with each of those (if the purchasing party wants them*) - has been allowed by the special purpose trust.
*The sale of Bose Ride (an offshoot of Project Sound) was an example where the IP/technology was purchased, but very few people went to the purchasing party with the selloff and shut down transation. Bose Electroforce was an example where IP/tech/people all were part of the selloff and shut down transactions, going to the purchasing party.
What if Bose Makes a loss, MIT can't still sell the gift?
What's it about layoff's to keep Bose profitable?
Once again: MIT is not allowed to sell its stake in Bose Corporation, under the terms of Amar Bose's gift.
What if MIT sells Bose and the buyer gets rid of current management?
They will do everything for MIT to not sell it, layoff more or less.
At this point does it even matter?
Why did someone ask this? How bad is it? On a 1-10 what number are 1 is good 10 is terrible 😕
They can sell the company in pieces till only the research or non product part remains and merge it with MIT as Bose labs
OP here: So, MIT might not be able to sell the company. It doesn't matter to them anyway. It was a gift. So, let the golden goose run as far as it can.
However, there might come a time where the company might sustain recurring losses over period of time. Board might not layoff their our way to profitability for a sustained period. I'm just curious about the end game of the board or whoever has stake and power in the company, because I think, if the company doesn't have cool IP to sell, there might not even be a chance to sell parts of company
They don’t have say into Bose business. Just reap the benefits when there are some. Why would they want to sell?!?!
Not if profitable, even if it means massive layoffs so that executives can live another quarter till they find a next gig.
It's my understanding that any shares of Bose Corporation, which are not publicly traded, can only be sold back to Bose Corporation, and the number of people who have owned shares is very small indeed. Mostly directors. Names such as Bose, Hieken, maybe Froeschle and Greenblatt.
The deed of gift or whatever the document is called may not allow MIT to do anything with the shares other than giver them back to Bose Corporation. It's doubtful they could sell to anyone else.