Monday, May 09, 2005

I like free markets. I don't like greed.

This week's Carnival of the Capitalists is educational, as always, which means that I did not read most of it. Why would I read anything educational? Remember how I'm done school?

I did read this post, however, about Linkin Park, who sing some seriously good songs, such as "In the End."

Linkin Park, the rock/rap group that is one of Warner Music's most successful acts, is publicly protesting the company's upcoming IPO. The band is 'offended and discouraged' that only $7 million of the $650 million raised will go to WMG and wants out of its contract. Other Warner Music acts, including Metallica and Kid Rock, have
also been critical of the company in recent months.
Here is a copy of Linkin Park's comments and WMG's response.

Among the Linkin Park allegations?

...of the planned $750 million raised by an IPO, only about $7 million will be put toward the company's own operations, with no money going to WMG artists.

Where the hell is the rest of it going?

I don't download internet music because I believe it's stealing. But I ardently disapprove of major comapnies taking advantage of bands to fatten profit margins. Have an IPO, and put the bloody money into the company to help sell more CDs! (That's the kind of capitalism I like.)

For West Wing fans, here's a story about Notre Dame.


Blogger Warwick said...

An IPO is not profit. It is the raising of capital for business purposes.

Some of the uses could include paying down debt which means the money is not staying in the company but is being used to substitute out Debt for Equity (shares in the company.)

Othere uses could be using the funds to fund acquisitions of other companies, to invest in PP&E (property, plants and equipment) or any other business use. It is not to give out to greedy Capitalist carricatures.

1:12 p.m.  

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