Ming Thein's written a remarkably silly bit of analysis of the Hasselblad/DJI situation in which he adds exactly one bit of information, namely Chinese businessmen are sharp dealers who do not invest in things they think will fail. As opposed to whom? Are the Swedes famous for investing in things they're pretty sure will collapse?
First a little background. Suppose that a year ago Hasselblad's outstanding stock consisted of 100 shares, and that VMCap, the private equity firm that acquired H some years ago, owned 80 shares, and DJI owned 20. This is, obviously, simplified for clarity.
In order to infuse cash into H, would DJI buy some of VMCap 80 shares? No, they would not. That is the wrong layer of the ownership onion. Money given to VMCap to buy, say, 31 of their shares, would go to VMCap's fund, and become cash potentially to return to their investors or whatever. That money would not be accessible to H, unless VMCap elected to either loan to it H or purchase new shares of H with it. It is VMCap's money, not Hasselblad's.
If I buy a share of Microsoft from you, does Microsoft get the money? No. Even if I buy every share of Microsoft that's out there, Microsoft sees not one cent.
No, the only way money actually goes to H to fund the company is if H issues more shares. They print up another 100 shares and sell them to DJI. Now DJI owns 120, and VMCap owns 80, and DJI is the majority shareholder. The value of H has changed by the value of however much money DJI gave them for the shares. That cash is now sitting in H's bank account, and counts toward the value of H. So VMCap now owns a smaller slice of a larger pie, not even including things like "and now the projected growth is much bigger to blah blah blah" which is the usual story. There's a thing called a Balance Sheet which you can look up.
There are some odd corner cases. For example, if DJI actually loaned Hasselblad the money, but the loan was collateralized with either newly issued H stock, or paper which can be turned in to newly issued H stock (warrants, I think these things are called). This might actually have happened, and been misinterpreted by Kevin Raber's sources. In a case like this DJI would not be a majority owner, yet, but would be in a position to become one if the loan doesn't get repaid.
Ok, with that background, let us now quote the Marvelous Mr. Thein:
One thing I haven’t yet seen postulated is that the DJI investment was not necessarily a buyout: it may well have been an expansion with issue of new shares (Note: I don’t actually know if this is the case). This makes quite a bit of difference to the interpretation, because buying something over implies that the other party has decided there are better uses for their capital, as opposed to perhaps having to maintain portfolio diversification, or not having more to invest being a closed fund. This kind of corporate action is quite common when companies have to raise more capital for expansion.
Now, I don't actually know what the second sentence really means, it appears to be word salad with a hint of VMCap maybe thinks there are better uses for their money, or maybe they ran out of money in that pot which is frankly self-evident, since they chose not to infuse the cash. Given the background that you and I now both have, this whole paragraph a ludicrous statement. Of course H issued new shares (or, possibly, doled out some shares they had issued but not sold in the past which is functionally identical). Of course it was not a buyout, that would give H $0 in new capital, thereby quite missing the point. I think this is a remarkable statement from someone who has, well, let's quote him again:
I did work in M&A, private equity and at senior operational positions for the better part of 10 years