Pluralistic: The long lineage of private equity's looting (02 June 2023)

Today’s links The long, bloody lineage of private equity’s looting: Or, if you prefer, “plundering.” Hey look at this: Delights to delectate. This day in history: 2003, 2008, 2013, 2018, 2022 Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading The long, bloody lineage of private equity’s looting (permalink) Fans of the Sopranos will remember the “bust out” as a mob tactic in which a business is taken over, loaded up with debt, and driven into the ground, wrecking the lives of the business’s workers, customers and suppliers. When the mafia does this, we call it a bust out; when Wall Street does it, we call it “private equity.” It used to be that we rarely heard about private equity, but then, as national chains and iconic companies started to vanish, this mysterious financial arrangement popped up with increasing frequency. When a finance bro’s presentation on why Olive Garden needed to be re-orged when viral, there was a lot off snickering about the decline of a tacky business whose value prop was unlimited carbs. But the bro was working for Starboard Value, a hedge fund that specialized in buhying out and killing off companies, pocketing billions while destroying profitable businesses. Starboard Value’s game was straightforward: buy a business, load it with debt, sell off its physical plant – the buildings it did business out of – pay itself, and then have the business lease back the buildings, bleeding out money until it collapsed. They pulled it with Red…Pluralistic: The long lineage of private equity's looting (02 June 2023)

Leave a Reply

Your email address will not be published. Required fields are marked *