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Don't forget the real estate shenanigans. 1. Slowly but steadily run the retail operation into the ground. 2. Sell the real estate to your own REIT, and use t
by flyinghamster 9y ago
Don't forget the real estate shenanigans.
1. Slowly but steadily run the retail operation into the ground.
2. Sell the real estate to your own REIT, and use the proceeds to prop up the stores - but now they're on the hook for rent.
3. Continue running the stores into the ground, and when they inevitably can't make the rent, shut them down. Your REIT now holds a lot of prime real estate that can be sold or rented to others.
- btian 9y agoWhy would they do that? If they want to run stores into the ground, they would have closed them all by now.
- jedberg 9y agoIt cuts the shareholders out. It leaves the valuable part of the business in the hands of a select few, and leaves the crappy part of the business in the hands of the shareholders.
- turk184 9y agoThat was a keen ploy to buoy the stock for a couple more years so the insiders could get out of their holdings. It was like a rear-guard holding action. It takes time to unwind large positions, then leave Mom & Pop holding the bag. It's an age-old Wall Street tradition.