36

In Batman Begins, after Bruce Wayne's extended absence, we learn that Wayne Enterprises has had him declared dead, and that all of his assets have been transferred to Alfred as per his will.

We also learn that Wayne Enterprises is being taken public.

So, how is it that Bruce Wayne was able to buy back all of the shares of Wayne Enterprises that were offered for sale?

Typically billionaires like the Wayne family do not have that much cash sitting around (oh, they still have a lot of cash, but unlikely to have billions of dollars in cash) - their value comes almost entirely from their privately held shares in their company.

So how is it that Bruce Wayne is able to buy a controlling stake back into Wayne Enterprises? In the movie itself it's really just given a hand wave of "Complicated things you wouldn't understand".

  • 4
    I'm not totally versed on the legal nuances of a company going public, but it was my understanding that his (family's) shares were sold at price X, giving him a sudden influx of cash, and then he simply used the money to immediately buy them back on the market. Any discrepancy in price could be explained through loans or investors. There may be more to that story than I'm aware of, so I'm just putting this as a comment, but it was my understanding that because the company went public, he got a huge paycheck, and that's where the money came from. – Nerrolken Nov 13 '14 at 23:09
  • @Nerrolken - that could make sense. But then I am surprised that he was able to waltz into the Wayne Enterprises boardroom and demand a job. Unless they were just humouring him, as his surname was on the building. – Mark Henderson Nov 13 '14 at 23:13
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    Are we assuming that Alfred wouldn't just give him the money back? – Valorum Nov 13 '14 at 23:14
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    @Richard OP isn't asking about Wayne's inheritance or person wealth, he's asking about the much greater wealth needed to buy 50% of the shares of a public company. Steve Jobs had nowhere near enough personal wealth to buy more than half of Apple, if it had gone public against his wishes. And MarkHenderson, I think they were humoring him, frankly, at least until the end of Batman Begins when he asserted actual control over the company. After all, he requested to be put in charge of Applied Sciences, which was a dead-end division. – Nerrolken Nov 13 '14 at 23:19
  • @Richard yes I am assuming that Afred has either given it all back to him, or done the purchases on his behalf. – Mark Henderson Nov 13 '14 at 23:20
34

My understanding is that, due to the fact that Bruce has been declared dead Mr Earle is able to turn the company from privately held to public, by selling shares. This means that the participation of the Waynes in the company (whatever % it was) is ignored and the control of it goes to the board (he would be "forcing out" the Waynes from their own company, but the thing is that there is no Waynes to control the company). Then Earle is able to make this move.

But Bruce still has money when he comes back, even in the process of coming back from the dead. Probably because Alfred was left not only as legal guardian of Bruce, but also as legal executor of the Wayne's will and assets. That is the same money Bruce uses to "buy hotels" and pretend to live like a playboy.

It seems actually form the conversation between Bruce and Alfred on the plane back to Gotham that Earle just was able to declare Bruce legally dead and go ahead with this plan:

Alfred Pennyworth: Well, actually it was Mr. Earle, he's taking the company public. He wanted to liquidate your majority shareholding. Those shares are worth quite a bit of money.

Bruce Wayne: Well, it's a good thing I left everything to you, then.

Alfred Pennyworth: Quite so, sir. And you can borrow the Rolls if you like. Just bring it back with a full tank.

So, Bruce Wayne uses his own money to buy back his family's (former) company through the shares. He uses the money that the Wayne family still has and Alfred, as legal executor of the Wayne's will was keeping, to buy enough public shares to become the owner again (With a majority of the shares of a company, at least 51%, you become the owner of the company.).

The tricky parts would be:

  • Bruce loses a lot of money, because he is forced out from his own company when he is declared legally dead. I'm unsure if he would be to see any money form the sale of those shares.

  • He would have to use a LOT of money, to buy at least 51% percent of the company, but it seems that Alfred kept the money, and the Wayne fortune is in the billions of dollars, so no big deal (suspension of disbelief on how rich Bruce Wayne is).

  • Bruce says he bought "through various charitable organizations". Probably he did so to go below Earle's radar when buying the company, but by doing it this way he would be needing even more money. My guess is that it could be like in a takeover bid. Lets say that Leslie Tompkins' clinic buy X shares, and then re-shells them to Bruce (for the same or higher price). This could have the handy effect of the hostile takeover (Bruce could not be allowed to buy more than a certain % of the shares, but by buying from third parties he might be able to overcome this restriction).

Earle offered the excuse of "Complicated things you wouldn't understand" to Bruce because he considers Bruce a fop and thinks he can humor him and go ahead with the plan. Also, probably Bruce doesn't have time to be declared "legally alive" again soon enough to stop the company going public. But Bruce's playboy façade works well and is able to go below Earle's radar when making his move and buying the majority of shares and regain control and ownership of the company.

  • This is a better answer than mine, even if it is largely guesswork. You have my +1 – Valorum Nov 14 '14 at 2:39
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    Even if Bruce Wayne is dead, there is no way that Earle can say "so the company keeps it share". That share is a right that will be inherited by whoever is in Bruce's last will, or whoever happens to get a right of inheritance (in last case, usually the State). It is like saying that if the old, child-less woman across the streets dies, you can just claim his flat for you. – SJuan76 Nov 14 '14 at 12:08
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    @SJuan76, good point. Maybe Earles's move was declaring Bruce dead then going public, so the control of Wayne enterprises would go to the board/shareholders, instead of the state. It was a two-steps plan to control the company. – Kreann Nov 14 '14 at 13:57
  • Also, I would say Bruce doesn't have to actually own 51% of the shares, he just has to control the votes of the shareholders. Presumably, he could have had other investors buying shares (wealthy friends of the Wayne family?) with the agreement that they would cast their votes for him as Chairman of the Board. – Geoff Nov 14 '14 at 15:34
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    This answer does not address the question's biggest point: the Waynes may have lots of money, but that should be tied up in the company's shares themselves, not just cash laying in a bank. Thus, there's no way Bruce Wayne has extra billions in his name to buy back his company. – Heisenberg Nov 14 '14 at 22:08
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There's literally no explanation. It just gets hand-waved away.

The movie script is utterly unilluminating on the subject of where he gets the $5-10 billion you'd need to buy a controlling interest in a multinational company.

Presumably he got his money back from Alfred and that was sufficient.

WAYNE : And I bought most of the shares. A controlling interest, in fact, through various charitable foundations, trusts and so forth...

Alfred is smiling in the front seat.

WAYNE (CONT’D) : ...Look, it’s all a bit technical, but the important thing is my company’s future is secure.

  • 2
    Just one of those things I guess! Best not to look too deeply at superhero movies, after all. – Mark Henderson Nov 14 '14 at 0:50
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    @MarkHenderson - I'm not happy with this answer. – Valorum Nov 14 '14 at 0:55
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    just as well it's not your question then, but I'll leave it open for other input – Mark Henderson Nov 14 '14 at 0:56
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    (fyi; I'm not really someone who insists on an answer from a rigidly defined canon. I'm totally OK with suspension of disbelief if there's no other answer) – Mark Henderson Nov 14 '14 at 0:57
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    I wouldn't put so much emphasis on the "look, it's all a bit technical..." quote, as that was just Bruce throwing the line back in Earle's face. – phantom42 Nov 14 '14 at 4:40
12

The company being not publicly traded means just that: their stock is not sold in regular markets (v.g. Wall Street).

A company that is publicly traded benefits from access to bigger opportunities of financing by selling stocks, but also must give more information to the public and authorities so the public can know what they are buying.

As I understand it, Earle's plan was to make the company go public, and emit more stock. This would have made the share of control of the original owners to dilute.

Earle's benefits from this by two ways:

  • buying a significat porcentaje of the new stock, increasing his personal share.
  • more importantly, since he thought that Wayne would not understand the maneuver (after all he was just a frivolous playboy), he expected Wayne not to try to buy stock in his own. That would make his share minor.
  • the other members of the board were not as invested, they could be happy that the public market would made their stocks easier to be sold when needed.

The bottom line is that it would be more difficult to get an agreement of the holders of half the stock to dismiss him as CEO, since small inversors sheldom have the opportunity/interest/information to vote.

For example, imagine that pre-public there where 5 investors with 20% share each, and that a 50.1% share is needed to dismiss Beale. It would only three of them to agree to overrule and/or dismiss Beale.

Now, imagine that after going public, the same 5 investor have 12% each (the rest going to small investors or Beale). Unless all 5 of them agree on something, Beale's will be the one directing the enterprise.

What Bruce did was to buy (through 3rd parties so it would not be noticed) enough of the new stock to dismiss Beale.

About from where did the money come, an important (unasked) issue is which was Wayne's control before. If it was 49%, it should not have been that difficult to get to 50.1%. Anyway, there are a couple options:

  • cash, as you noted, is not very likely since most of it would be invested.

  • selling investments in other enterprises (after all, it is usually advised to diversify your investments).

  • loans (either on the stock being bought or other of Wayne's properties)

  • given the Wayne connections, he could also have convinced a group of millionaires to but the stock and let him represent them.

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    Also to note, probably the news that a major shareholder was dead with no known successor might have alarmed the buyers, lowering the new stock price and benefiting Bruce. – SJuan76 Nov 14 '14 at 12:34
  • And finally, the "hand waving" theory is not to be discarded. After all, this is a Batman movie, not Wall Street, so probably the writers only wanted something that allowed Bruce to win at the end and that "sounds ok", but without a serious feasibility analysis. – SJuan76 Nov 14 '14 at 12:42
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    This and @Lightness's answer are the best. The conversation between Bruce and Alfred about his legal death and estate strongly implies that the Wayne family stake in Wayne Enterprises has not vanished. Pre-IPO, Bruce/Alfred is still the majority shareholder, but whatever stock dilution, offering etc. or bylaws the board are changing in the IPO just require Bruce acquire a little more stock to regain control, not going from 0% to 51% stock. – Dacio Nov 14 '14 at 17:14
3

The value of Bruce's shares doesn't just vanish. It would have gone to Alfred, as Alfred was the benefactor of all of Bruce's assets. Therefore, as Alfred's friend and given that Alfred showed he was more than happy to let Bruce use his old money, he should have more than enough to plough that dough back into Wayne Enterprises.

  • 1
    People seem to not understand that when Wayne Enterprises "went public", that means the public handed over cash to the private owner of Wayne Enterprises i.e. Alfred. – Kyle Hale Jun 23 '16 at 15:23
1

Bruce Wayne's family has owned a fairly large portion of Wayne Enterprises for many generations (Wikipedia says at least from the 19th century). The Wayne family has been earning dividends from Wayne Enterprises for decades. These dividends would (probably) have been invested into other businesses, hedge funds, properties etc. and grow over all that time. Money, when invested in a diversified basket of assets over a long period, tends to grow. A LOT. $1m invested in the stock market in 1935 would be worth $2.4b today, in an extreme case.

After Bruce's parents died, all these Wayne family assets went to him, and then to Alfred (after Bruce was declared dead). Once Bruce comes back "from the dead", he regains control of all those assets and the money they continually throw off.

Bruce either sold all those assets, or, more likely, took out a loan against them and his shareholding in Wayne Enterprises. He then used the money from the loans to buy up enough of the shares from the public offering that, combined with his existing holdings of Wayne Enterprises, would be sufficient to give him a controlling stake.

So yeah, it really was a bit technical.

1

This is my theory. While they say Bruce had a majority before the IPO, they never said how much. So, let’s say hypothetically, Bruce had a 70% majority initially, as well as several hundred million lying around. With the selling of his shares, all 70%, he can easily buy back 51%. Or, if he wasn’t legally owning his assets by then, Alfred could have, and then sells it to Bruce for a cent or something.

  • Do you have any support for this theory, it seems to directly contradict the events of the film as outlined in the accepted answer. – Edlothiad May 4 at 15:44
0

Legally speaking, a will only works if a person dies. As you yourself mentioned, in accordance with Bruce's will, all his assets were transferred to Alfred. But, such a will will take effect only when that testator dies. If a testator goes missing, and is presumed dead, but later, it so turns out that the testator is alive, the property automatically returns to the testator. Since there was no death, the testator remains the rightful owner in the eyes of the law. Alfred did not have to return anything to Bruce - Bruce remained the sole rightful owner.

Now if Alfred had used away all of Bruce's property lavishly, then we would have a legal dilemma, as Bruce was presumed dead and would have no case against Alfred when he got back. But, since Alfred preserved all the property in a responsible manner, he would be required by law to step back and have Bruce retake his possessions. So, with his billions back in his possession, it required no great effort to go out in the market and buy the shares.

I hope that makes sense.

0

First off, even as a private company, Wayne Enterprises is not owned 100% by the Waynes. But they owned most of the company. In addition to owning that, they also had tremendous assetts. When Wayne was declared dead, he left EVERYTHING to Alfred Pennyworth. Therefore, Alfred Pennyworth then owned a majority share in Wayne Enterprises.

When Bruce went to speak to William Earle, he is given a trust fund equal to the price that his shares would be worth. It's important to remember that Alfred would have maintained the percentage of the company that Bruce owned.

So, Bruce is given an enormous trust fund. Then the company has its IPO. He uses the money in the trust fund to buy shares through satellite companies. But the main thing is, he used the money from the trust fund that Earle gave him to buy a majority sharehold.

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-3

Well how much do you think Wayne mansion is worth. Well whatever it is worth, its insurance will be higher than that. Technically speaking, Bruce Wayne just came across a lot of cash when his mansion burned down in to ashes. Now he can certainly use that money to buy the shares (ofcourse he will need the money to build his new mansion, but its a long process and will be anyway funded by the Wayne enterprise income)

  • 1
    The value of Wayne Enterprises is in the billions (else Bruce would not be a billionaire), and the most expensive private estates in the (western) world are not worth billions. Please cite a reference for the insurance value of Wayne Mansion being multiple billions of dollars. – DavidW Jul 27 at 0:46

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