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>>Banking on the public being stupid is not a good idea. By the time public wakes up, the thinking goes, we've already cashed our chips. How many investment fi
by onetimemanytime 7y ago
>>Banking on the public being stupid is not a good idea.
By the time public wakes up, the thinking goes, we've already cashed our chips. How many investment firms buy solid businesses, only to chop them up, milk them dry, load with debt and then IPO?
- dba7dba 7y agoThis comment is downvoted but I have to agree with this. Rarely, very rarely do these people ever get caught or have to pay back the ill gotten money.
- kortilla 7y agoTo the point where the business is no longer viable? Very rarely because without fraud it’s hard to hide that in the IPO docs.
- onetimemanytime 7y agoNo longer viable or barely viable is a fine line. Here are a few cases: https://www.washingtonpost.com/business/the-debt-laden-lbo-that-wants-to-be-a-hot-tech-ipo/2019/09/13/eec65d76-d619-11e9-8924-1db7dac797fb_story.html https://www.washingtonpost.com/business/the-debt-laden-lbo-t... https://www.bloomberg.com/news/articles/2006-08-06/buy-it-strip-it-then-flip-it https://www.bloomberg.com/news/articles/2006-08-06/buy-it-st... Edit: It's not fraud, they disclose it all but a lot of people are fooled by the low IPO price, even though the business is loaded with debt and has a gazillion shares issued.
- aguyfromnb 7y agoThis is why Silicon Valley stalwarts like a16z are pushing for an "alternative" stock market. They need a less transparent place to dump this stuff on the bagholders.