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> Yep, but who else was interested in investing in Joann's in the 2010s? This is begging the question. At no point did Joann's require investment.
by Blackthorn 2y ago
> Yep, but who else was interested in investing in Joann's in the 2010s?
This is begging the question. At no point did Joann's require investment.
- alephnerd 2y ago> At no point did Joann's require investment. Inventory, salaries, rent, mortgages on stores, ERP, expansion, etc all cost money. Yet if revenue remains flat or grows at a rate that is lower than the above inputs, you absolutely need capital.
- Blackthorn 2y agoThat's just restating the thesis. It's still begging the question.
- hollerith 2y agoHow do you know? Have you gone over their financial statements?
- shitecoin 2y ago[flagged]
- lotsofpulp 2y agoAnyone who owns equity might want to sell it at any point in time for myriad reasons, regardless of what is on financial statements or “need for investment”.
- hollerith 2y agoThat argument does not apply in the current case, though, because Joann was being publicly traded [1] when it got bought by private equity in 2011. The management of the publicly-traded company explained, >“We are excited about the prospect of working with Leonard Green & Partners [a private-equity firm] as we further capitalize on opportunities to accelerate the expansion and upgrade of our stores and pursue market share gains,” Darrell Webb, chairman and chief executive of Jo-Ann Stores, said in a statement [1]. [1] https://archive.nytimes.com/dealbook.nytimes.com/2010/12/23/leonard-green-offers-1-6-billion-for-jo-ann-stores/ https://archive.nytimes.com/dealbook.nytimes.com/2010/12/23/...
- lotsofpulp 2y agoPart of owning equity in a publicly traded company is for shareholders to accept the decisions of the board (management). Or otherwise engage in a conflict with the board. Even if Joann was a viable business on its own, if most shareholders wanted to accept the price being offered for the business (presumably reflected by the board's votes), then that is all that matters.
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- Blackthorn 2y agoI don't think anyone is arguing over that. What we're saying is that Joann's was a victim of private equity, which is orthogonal to that point.