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Autotrader.com Gives $400 Million to…

When Autotrader.com , the internet’s ultimate automotive marketplace, recently borrowed $400 million, folks got to wondering just what the online juggernaut was up to. Some sort of expansion perhaps, people thought, or, a purchase of a rival, some good old fashioned marketing, or research and development.  Nope, no, and uh-uh.

Autotrader borrowed this money to give their executives and private shareholders a one-time dividend, a big, fat $400 million dividend. The privately-owned company is doing this in preparation for its IPO. The funny thing is that it will be the future shareholders, those who buy into the company when it goes public, paying back the loan.

The online car trader is not the only company that has different rules for different types of shareholders. Many public companies do. Ford and twenty-something other auto-geared companies do as well.