General Discussion

louis-t

(24,362 posts)

38. I didn't say the goal shouldn't be profit.

Wed Apr 30, 2025, 11:32 AM

Apr 30

But the equity firms really don't care if the company they 'saved' fails because they've already been paid. The equity firms then use bankruptcy laws to favor themselves, they don't have to pay back the loans. If it wasn't extremely lucrative, they wouldn't be doing it. Mitt Romney made a fortune after reluctantly getting involved with Bain Capital. He wouldn't even agree to it unless he didn't have to use his own money. Very few companies that are 'rescued' survive. If private equity only made money if the companies they bought survived more than 10 years, they wouldn't be in business long. Guitar Center was bought by Bain Capital and survived for 13 years, then filed for bankruptcy a few years ago after interest on the loans they were forced to take on exceeded $1 billion. Even Staples, which seemed to be doing well after they were bought by private equity in 2017, are having trouble again. The debt is crushing and it only takes a drop in sales, which they are experiencing, to bring about their demise. 20% of private equity-owned companies fail within 10 years. I just read an article that tries to convince the reader that private equity "creates millions of jobs". Actually, the first thing private equity does when buying out a company is restructure, which usually includes firing a bunch of people.

Edit history

Please sign in to view edit histories.

Recommendations

2 members have recommended this reply (displayed in chronological order):

Bernardo de La Paz Trailrider1951

53 replies

= new reply since forum marked as read

Highlight:

It starts with a closing store. [View all] AStern Apr 29 OP

Socialized Capitlism Kid Berwyn Apr 29 #1

Excellent article. Thanks for posting. I gave a talk about this to me senior group. They SharonAnn Apr 29 #2

I love Hooters and nothing to do with the girls. I really like their wings, eat there about once a week. Expensive. OverBurn Apr 29 #3

I had a birthday lunch there Skittles Apr 29 #22

We used to have nice things in the United States. Initech Apr 29 #4

Does America need a Vladimir Lenin style Dan Apr 29 #5

That turned out badly for the common people of Russia. Mister Ed Apr 29 #8

Meet the new boss, same as the old boss /nt localroger Apr 30 #52

No TheProle Apr 29 #15

Both Lenin and the Trump coalition are politically authoritarian. markodochartaigh Apr 29 #18

I believe this is called "pump and dump" Fil1957 Apr 29 #6

Regan and Bush 1. IbogaProject Apr 29 #7

I seem to have read DENVERPOPS Apr 29 #9

It isn't Capitalism vs Socialism MadameButterfly Apr 30 #29

When corporations become government louis-t Apr 30 #39

JoAnne's declared bankruptcy before being sold to a private equity firm. MichMan Apr 29 #10

Just remember, the goal of private equity isn't to save the company. louis-t Apr 30 #34

Isn't profit the goal of every business ? MichMan Apr 30 #36

Entrepreneurs grow companies. Vulture capitalists (private equity) suck them dry, which they have to do in private. Bernardo de La Paz Apr 30 #37

What happens when those entrepreneurs fail? MichMan Apr 30 #40

I was commenting on the general claim that included vulture private equity capitalists in "seeking profit" Bernardo de La Paz Apr 30 #45

A couple of points about Joann. louis-t Apr 30 #46

I didn't say the goal shouldn't be profit. louis-t Apr 30 #38

What is the proposed solution for failing companies if they are prohibited from selling them? MichMan Apr 30 #41

Actually, publicly-owned companies have a better success rate. louis-t Apr 30 #44

I never knew they got public financing of the debt. I always thought it was banks taking the risk MichMan Apr 30 #47

It's banks, bank syndicates and private investors. louis-t Apr 30 #49

you sure like defending cybertrucks and vulture capitalists Skittles Apr 30 #51

"Capitalism has made it this way..." ZDU Apr 29 #11

Excellent. Also Coos County resident. NT Wah_Guy Apr 29 #12

And most people don't have a clue how it all works TexasBushwhacker Apr 29 #13

Bain! Literally the Bain of our existence. calimary Apr 29 #26

Been to a mall lately? BidenRocks Apr 29 #14

Get in the wayback machine Earl_from_PA Apr 29 #25

I'm retired and old. I have a couple of pairs of shoes with easy slip on, from LL Bean and they've been worn by me for CTyankee Apr 29 #27

This can be a positive thing Sucha NastyWoman Apr 29 #16

BlackRock, Vanguard, and State Street hold significant ownership stakes in many media companies. sop Apr 29 #17

Worse: hasn't Blackrock been involved in scooping up huge numbers of homes for sale, taking them off wiggs Apr 29 #19

Yes, and they aren't the only ones. It is a major reason louis-t Apr 30 #35

Agree. Terrible, terrible trend. Most of the US will be renters eventually. Except the top 10%. nt wiggs Apr 30 #53

Big Lots filed bankruptcy too. Emile Apr 29 #20

powerful Demovictory9 Apr 29 #21

A Nit To Pick ProfessorGAC Apr 29 #23

This is a rather depressing post. WestMichRad Apr 29 #24

If my retirement account is funding this... dickthegrouch Apr 29 #28

The Mitt Romney playbook. Vulture Capitalism. Scalded Nun Apr 30 #30

As a Professional Seamstress, I am saddened by the closing of JoAnn Fabrics. ProudMNDemocrat Apr 30 #31

Joann's has been in trouble for years, decades, even. Poor management, stores kept half-empty, employees of the devil... mucholderthandirt Apr 30 #32

The home sewing industry DENVERPOPS Apr 30 #42

Link without FB? Starbeach Apr 30 #33

marygeddry.substack.com AStern Apr 30 #43

Joanns should have done store renovations JI7 Apr 30 #48

Its a problem when they can make money quakerboy Apr 30 #50