Corporate America has built up defenses against the likes of Carl Icahn, Nelson Peltz and other corporate raiders who have rattled the cages of chief executives, pushing for higher stock prices. Now companies have a new investor to worry about: the president of the United States.
President Trump has inserted the government into U.S. companies in extraordinary ways, including taking a stake in U.S. Steel and pushing for a cut of Nvidia’s and Advanced Micro Devices’ revenue from China. Last month, the Pentagon said it was taking a 15 percent stake in MP Materials, a large American miner of rare earths.
And on Friday, Intel agreed to allow the U.S. government to take a 10 percent stake in its business, worth $8.9 billion.
These developments could herald a shift from America’s vaunted free-market system to one that resembles, at least in some corners, a form of state-managed capitalism more frequently seen in Europe and, to a different degree, China and Russia, say lawyers, bankers and academics steeped in the history of hostile takeovers and international business.
One wonders how does the federal government , which is running a deficit every year, have money to invest in companies? This really is socialism.
