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I’ve yet to hear of a single case of private equity actually making anything better. As far as I can make out private equity means “we are not actually capable

• musicale 2y ago
  Previous owners and shareholders potentially benefit if they receive a higher than market price for the company, and that's probably why they sell in the first place. In theory struggling businesses can be turned around and made profitable. In practice it seems to be about maximizing value extraction (often through large payments to the new owners) until the business shuts down, or simply by selling off the company's assets if they are worth more than the buyout price. There is is a huge conflict of interest when a company is saddled with debt payable to its new owners, who will have strong incentives to pay that debt off (while paying themselves huge salaries and bonuses) even if it means killing the business, harming any remaining shareholders, employees, customers, etc.
  • olliej 2y ago
    It’s done to properly running businesses, often causing immense harm to others along the way, but the entire goal of the process is to leave an asset less bankrupt shell so no one can be sued. It should be illegal, but because it’s a rich people destroying the lives of the poor, it’s a-ok.