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A Lesson from Buyout Land

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January 29, 2007 – Comments (0)

A quick point on the fundamental idea of these big buyouts: the investors are buying the company not to flip it, but rather to hold it for (typically) 4-7 years before relisting it on the public markets. Even after a company relists, the private equity firm still often holds a stake for a while. In the case of Seagate, as of October of last year Silver Lake Partners still held some Seagate stock nearly four years after Seagate's IPO. Can you make some money flipping stocks in the short term? Sure, I'd never argue with that. But take a hint from some guys making serious money -- big money is made choosing stocks wisely and holding onto them.

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