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Alpha Stage
Going Private
January 31, 2007







The Washington Post is running an article entitled, "Firms Go Private in Search of Deeper Pockets."

The article explains, "Not since junk bonds has an alternative form of investment risen to prominence as
quickly as private equity, an obscure world where fund managers risk billions to buy and try to turn
around slumping companies, and then sell them for a profit."

Companies such as Toys R Us, Neiman Marcus, Hertz, Burger King, Harrah's Entertainment, Clear
Channel Communications and HCA, the nation's largest hospital company, have been purchased by
private investors.
Read the Article!!


Discussion-Starters for Younger Children

  • Ask your students what it means to own something. What are your students' favorite things that
    they own? Why?
  • Consider playing a game with students in which they must describe their favorite
    belonging and others must guess what it is.

  • Can your students think of anything that they'd rather have than something they own right now?
    What? Why do they want this thing?
  • Consider making a list on the board of reasons why students might want things.
    Encourage students to think about how they might use these things for good purposes.

  • What could your students do to get this thing? How could they use what they currently own to
    help them get this thing? (Assume that their parents can not/will not give them the money.)
  • Consider having students draw pictures of things that they could do to acquire these
    objects. They might even make comic strips.

  • Tell your students to imagine that they are about to buy a new toy. What kinds of things would
    they want to know before they actually buy the toy? Why would they want to know these
    things?
  • Consider making a set of directions with your students as to what people should do
    before they buy something.

Discussion-Starters for Older Children

  • Vocabulary Terms to Discuss: "Private Equity"; Prominence; Buyout; and, Pensions.

  • What's the difference between selling shares of stock in a company and selling an entire
    company at one time? Can your students think of any useful metaphors for explaining this
    difference?
  • Consider asking students to develop such metaphors in groups of two or three.

  • Ask your students what they think the dangers would be of investing private money to buy a
    company? Why might somebody invest private money to buy a company? Encourage your
    students to support their thoughts.
  • These questions might prompts an interesting class discussion.

  • Consider the fact that managers of pension funds are often the private investors who buy
    companies. Are they really investing their own money. Why/why not? What kinds of
    implications might this fact have for individuals who invest their pensions with particular
    managers?
  • Pose the following question to students and ask them to write an essay in response to it:
    Should the U.S. Government regulate the ways in which pension managers invest their
    clients' money in private companies? If so, how? Students should thoughtfully explain
    their reasoning.
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(C) 2007, Andrew Pass Educational Services, LLC.