Solyndra Investor admits: we wanted the loan so we could 'go public and cash out'
A clearer picture of the underlying insider scheme at Solyndra is beginning to emerge.
Yuliya Chernova of the Wall Street Journal writes a superb column today regarding all the business problems that beset the scandal plagued Solyndra. There were a litany of engineering and business problems that were very apparent to everyone except, apparently, the White House politicos that pressured career officials in the government to extend a 500 million dollar loan guarantee.
The crony investors were given an unusually low interest rate for such a venture. Solyndra was first in line to get loan guarantees under the Obama program to promote solar energy ventures. Solyndra private investors were given priority in case of bankruptcy that placed their claims above those of taxpayers -- a highly unusual occurrence, according to the Wall Street Journal.
So who were the type of people granted such favorable treatment? Yes, Obama donors and bundlers. That has been widely publicized. But beyond that, what type of character did they possess?
One investor behind Solyndra blurted out the truth. The loan was needed and needed urgently to fatten up the company and show a going concern (with a factory, etc).
From the column:
There was another motivator -- Solyndra's management and investors had an eye on an initial public offering.
"There was a perceived halo around the loan," said an investor with knowledge of the company. "If we get the loan, then we can definitely go public and cash out."
The huge loan would be a selling point in an initial public offering. The company promoters could point out that the loan gave them credibility -- that the government had vouched for their viability and prospects.
The private investors would cash out and when the loan came due and the company was unable to pay, taxpayers would be the ones left holding the IOUs.
Take the money and run.