Jon Blund - Blåsningen
En warstory om ett ärligt menat köp av ett ruttet bolag
Decision-making and valuation when buying small caps is a poorly explored area. Likewise, since disputes about deficiencies in the company?s financial and legal standing are, almost without exception, resolved in arbitration with confidentiality requirements for both sides, there is very little empirical knowledge about such disputes. This paper hopes to add empiric experience by describing such a take-over ? the purchase of the Jon Blund companies. In this type of decision it?s easy, due to a number of weaknesses in the human psyche, to make ill-founded or bad decisions. The paper proposes how to overcome these weaknesses and make better decisions. It also describes how the examination, or Due Diligence, of the company before the purchase was not sufficient to find the deficiencies. The paper seeks to answer why it did not and where to look for such deficiencies. Since there is often no time, resources and money to conduct extensive investigations regarding a company's position in this type of process, I have finally posted a very simple proposal for a decision model designed to produce better decisions from limited resources.