How not to diagram company ownership

March 17th, 2015 § 1 comment

I’ve seen some truly awful infographics of corporate ownership structures. I’ve even occasionally perpetrated them. But this image is a classic of the genre:

Pretty convoluted, huh?

It’s from Muddy Waters, a much-feted research and short-selling firm. They are arguing that French conglomerate Bolloré owns a lot of itself through intermediate companies. We’re looking here at Financière Moncey, an indirect subsidiary of Bolloré, and the point is to show “how complex the relationships actually are” among these structures.

Look a bit more closely, though, and you’ll see that most of the complexity is artificially added. The diagram is just the same structures repeated again and again and again.

Here it is again, with all the repetitions deleted:


Fair play to Muddy Waters for figuring out the ownership structure. That kind of structure is painful to make sense of, and it’s easy to miss the circular ownership.

But they do seem to be deliberately exaggerating the complexity. Presumably the point is to show that things are so complicated that only their analytic genius can make sense of it. It goes with some snarky digs at analysts in the report itself — “BOL has likely been misunderstood because the complexity of its structure makes it infeasible to use Excel to estimate the percentage of circular ownership“. Much as I enjoy their approach, I wish they could make their point without, well, muddying the waters.

  • Mr A Writinghawk

    What happens if a company buys all its own shares? Does it disappear up its own bottom? Obviously it should be impossible, since the price of the non-circularly-owned shares should increase to total the value of the company, which is always more than it can afford in cash. But that assumes people know which shares are circularly-owned, which is not in general true. I dare say it’s obvious to people who think about these things, but it hadn’t occurred to me before that concealed circular ownership of some shares is a way for the remaining shareholders to systematically under-represent their wealth.

    By the way it is always your great big pictures, delightful as they are, which shaft my lj feed (in the role of rss reader) by making the ‘page’ much wider than it should be. Have you any idea why this is, considering that when I view your post directly, the image appears at a perfectly sensible size? (I guess it’s something I don’t understand to do with stylesheets.) I realise that Firefox is at fault anyway for the absurd assumption that because I’m viewing a page with a picture wider than my screen, I want all my text paragraphs to be that wide too. Sadly, everything is rubbish, and Firefox is a thing.

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