Just curious if there’s a rule against doing this:
Create two subsidiaries A and B of a holding.
Put B up for a IPO.
Take funds gained from IPO and create C, a new subsidiary of B.
Offer C for a IPO.
Sell B’s shares in C o A at a low price.
The initial investors in B are left with shares in a worthless/devalued company because all its assets have been funnelled to companies A and C.
I can’t see why it should be against the rules. Company B is not worthless in the end - after selling its shares in C to A it keeps the money, and the price is fixed. Of course: If B’s CEO decides to do nothing with the money you won’t get any return and nobody will buy your shares. But that is a risk you take with every investment in AS, it’s not specific to this situation.
The root of this is that a subsidiary of a publicly traded company doesn’t need to pay dividends. There’s an easy way to establish an airline with extra money but no obligation to its shareholders: