@e.t.theextraterristrial837
Since a private equity company started buying up shares in my company, they started cutting benefits and laying off employees to "create shareholder value"
@jefff7316
Worked for Sears for a decade and got out a few years after the Kmart buyout. Everyone that worked there felt that the executives intentionally drove the company into the ground to enrich a handful of people. The way they axed their pensioners was one of the saddest things I've had to witness in my lifetime. Best not to give a company loyalty these days, unfortunately.
@timmcgrath8742
Here in the UK, private equity firms are buying up veterinary practices (Vets) and then immediately doubling (at least) the cost of care and provided medicines, because they know people will pay above the odds for the care of beloved pets. It's an absolute cash cow for PE firms. It's not illegal, but morally it's pretty despicable.
@philsburydoboy
You’re missing how PE acquisition debt works. They acquire a company with it, but force the company to take on the debt. This is why they need to explain to their bank lender how strong the company is. That debt usually has huge interest which the company must pay back, siphoning off profits that any remaining shareholders would get. It is also typically structured as preferred stock with a huge multiple, so it must be paid back (sometimes 2 or 3 times) before converting to common stock. That means no shareholders outside of the PE guys get money until the PE guys get paid back in spades. It’s wild out there!
@asajayunknown6290
I was in M&A for four years. Private equity is a death sentence for most companies. Not always, but usually. PE is not a "business" in the usual understanding of that word. Their only purpose is to maximize the value of the assets, and pay their investors. How that happens is usually unpleasant for the employees of the acquired firms.
@aegisofhonor
Private Equity is essentially companies that use loopholes to avoid risk and get all the reward. Once you are in the inner circle of Private Equity, you essentially have your own personal money printer that you print from other people's money and debt with almost no risk what so ever. It should be illegal but it isn't for whatever reason. The rules need to be changed to force private equity firms to be responsible for the debt they take out on behalf of other companies.
@oliviao2238
During the pandemic, private equity bought considerable stakes in publicly traded companies that they saw were vulnerable. I guarantee they will load them up with debt and go out of business, putting workers again on the unemployment line as usual.
@ArtamStudio
Years ago I toiled at a company that was bought by KKR. Little was known of PE strategies at the time, but their behavior followed this pattern to a T - going from bad to worse. All they cared about was their EBITDA, for which we received no reward beyond our below-market-rate-pay. A few years after I got out, the company ceased to exist.
@thepandaahbear9025
It was NOT suggested by Starboard Capital to not salt the pasta water - they said that Olive Garden made that choice and wanted them to salt it again! Just pause the video at 10:36.
@TheMasterOfShadows
Oh how I love this video, now when people ask me why so many companies are dying, bought, sold, allowed to crash I can send them this video. Thank you for making my life so much easier lol
@Nohandleentered
Private equity would buyout candy from a baby
@MiddleAgedMillennial
Private equity is the aftermath of extreme inequality. Rich people have so much money, that they don’t know what to do with, that they use private equity as a way to try and make more money from their already insane hoard. They’ve ran out of ways to capitalize their own money themselves, and now look to businesses to get a cut of something people may need or utilize. If something big like AI or green innovation is going to be used by people, then they want a cut of that. That’s also why all these businesses encourage rising inflation and raising the CPI because it just better ensures that anyone starting a business will need a loan from them or the banks.
@spicymemes7458
Private equity is the Bain of human existence.
@4RILDIGITAL
Your explanation about private equity is really comprehensive and insightful. Your breakdown of complex concepts especially the 2 and 20 structure and the carried interest loophole were particularly helpful and easy to understand.
@mwwhited
My only question is how the hell can a cook pot company get away with voiding its warranty on chefs salting their water. That pretty much a requirement for many if not most dishes.
@DougDeYoung-gt4id
The goal is to gain control of the company, sell off or mortgage all the assets. Once it's leveraged to max and becomes insolvent they flush it with bankruptcy. The same thing there doing to our country USA Inc.
@jonathanabgrall6075
How to become rich while producing absolutely 0 value yourself.
@sgtkasi
The problem with private equity is that eventually you run out of other peoples' companies.
@jeremylawson6648
I worked for a boutique PE a firm fresh out of college, it took me like 2/3 months to figure out that they were actually stripmining companies. It was kinda gut wrenching but also interesting.
@HowMoneyWorks