• clutchtwopointzero@lemmy.world
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    5 months ago

    Typical Private Equity deal… The buyers take a massive loan in the name of the company they are buying then they use the sudden massive interest payments to explain the declining profits and the need to downsize. Then they find a way to squirrel out of the loans claiming the company sucked and let banks take remaining assets (or losses) and maybe resell the intellectual property to someone else right before that.

    • Tja@programming.dev
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      5 months ago

      So you mean that banks are dumb and give away money for free and then just take the losses and repeat thr process?

      • clutchtwopointzero@lemmy.world
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        5 months ago

        Actually banks take collateral that is normally not what the private equity firms target and that actually seems to work, but the consequence is that hard assets of the firm (offices, buildings, hardware, cash, etc) are essentially given up

        • starchylemming@lemmy.world
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          5 months ago

          so think of your company as a horse

          you sell it to someone for a nice price thinking the other one wants to ride the horse just like you did. but they are actually a butcher and make horse sausage out of it.

    • qevlarr@lemmy.world
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      5 months ago

      True, but we never expected that to happen with our company which was built on entirely different values. I am now committed never to let those vultures anywhere near a company I care about if I can help it, no matter their offer