Lessons from the Election: Private Equity Is Acceptable When it Involves George Soros

Bloomberg

Remember how time, energy, and money the Obama campaign spent attacking and maligning former Massachusetts Gov. Mitt Romney for his involvement in private equity (or “vulture capitalism” as some would have it)?

We remember these attacks because — other than Big Bird, binders, bayonets, and virginity voting — that’s all Team Obama talked about (and they still won).

What’s funny is that when someone like billionaire philanthropist and major Democrat donor George Soros engages in little “vulture capitalism,” nobody seems to mind.

Via Bloomberg:

ADT Corp. (ADT) authorized a $2 billion share repurchase program and initiated a quarterly dividend after investors George Soros and hedge-fund manager Keith Meister called on the home-security company to buy back stock.

The quarterly dividend will amount to 12.5 cents a share, payable Dec. 18 to shareholders of record on Dec. 10, the Boca Raton, Florida-based company said in a statement today. The buyback will end in November 2015.

In October, billionaire Soros joined Meister in urging ADT to buy back about 45 percent of its stock with borrowed money to take advantage of low interest rates. At the time, they were the biggest investors in the company following its spinoff from Tyco International Ltd. (TYC) in September.

A stock buyback (or “share repurchase”), as TheBlaze touched on briefly here, is when “a company buys back its own shares from the marketplace, reducing the number of outstanding shares,” Investopedia notes.

“Share repurchase is usually an indication that the company’s management thinks the shares are undervalued. The company can buy shares directly from the market or offer its shareholder the option to tender their shares directly to the company at a fixed price,” Investopedia adds.

You know who loves share repurchase programs? Private equity firms like Bain Capital. However, for whatever reason, Romney gets raked over the coals while Soros gets off without so much as a comment from the left.

Nope. Nothing to see here.

But wait! There’s more! Again, from Bloomberg:

ADT forecast a cash tax rate of 3 percent to 4 percent in 2013, down from 5 percent a year earlier, as the company applies a loss carry-forward balance. From 2014 to 2019, the expected cash tax rate is 5 percent to 8 percent before rising to 25 percent to 30 percent in 2021 to 2022, the company said in an earnings slide presentation on its website.

“Three to 4 percent? That tax rate makes Mitt Romney look like a villein,” writes Patrick Brennan for National Review Online.

So let’s see if we understand this correctly: When private equity involves Mitt Romney, it’s bad. But when it involves George Soros and rock bottom cash tax rates on share repurchases? No problem!

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Featured image courtesy Getty Images.