511–520 of 540 posts
I have the same question every time I see one of these articles. I think I've even posted the question in previous HN threads on private equity shenanigans. The question is: Why is this profitable? If the land is worth $1.5 billion, it should have cost PE more than $1.5 billion to buy the company. Then there would be no way to make a profit by selling the land, paying yourself, and letting the company go belly-up. Wh…
I have the same question every time I see one of these articles. I think I've even posted the question in previous HN threads on private equity shenanigans. The question is: Why is this profitable? If the land is worth $1.5 billion, it should have cost PE more than $1.5 billion to buy the company. Then there would be no way to make a profit by selling the land, paying yourself, and letting the company go belly-up. Wh…
I have the same question every time I see one of these articles. I think I've even posted the question in previous HN threads on private equity shenanigans. The question is: Why is this profitable? If the land is worth $1.5 billion, it should have cost PE more than $1.5 billion to buy the company. Then there would be no way to make a profit by selling the land, paying yourself, and letting the company go belly-up. Wh…
I thought the PE model was to buy one of these companies, leverage them with many multiples of debt while paying themselves out massive fees and bonuses, then letting the huge interest and debt load take its toll on the husk of the company.
I have the same question every time I see one of these articles. I think I've even posted the question in previous HN threads on private equity shenanigans. The question is: Why is this profitable? If the land is worth $1.5 billion, it should have cost PE more than $1.5 billion to buy the company. Then there would be no way to make a profit by selling the land, paying yourself, and letting the company go belly-up. Wh…
Because, contrary to public belief, PE firms are skilled and sophisticated managers. Most deals are successful under their management, and this is why banks usually lend 70-90% of the purchase funds. They specifically target companies that are undervalued, in distress, and can be turned around or liquidated for more than the cost. PE isn't an exotic business philosophy. It is literally just a private buyer.
With a complex tax-favorable structure, https://www.ropesgray.com/en/insights/alerts/2019/02/tax-iss...
They sold their real estate for 1.5 billion and then red lobster paid 200 million a year in rent. That’s insane. In 7.5 years they would pay back the purchase price. That just seems like a massively bad deal for red lobster, I wonder was there another way the private equity firm made out on that deal ?
Holding a ton of a cash locked up in assets is highly inefficient.
Google did this - sell a building they own and lease it back. Do something else with the money.
The nice thing about the lease is that it’s a tax deductible expense for the business, and if you no longer need it, just don’t renew the lease.
I have the same question every time I see one of these articles. I think I've even posted the question in previous HN threads on private equity shenanigans. The question is: Why is this profitable? If the land is worth $1.5 billion, it should have cost PE more than $1.5 billion to buy the company. Then there would be no way to make a profit by selling the land, paying yourself, and letting the company go belly-up. Wh…
Because, contrary to public belief, PE firms are skilled and sophisticated managers. Most deals are successful under their management, and this is why banks usually lend 70-90% of the purchase funds. They specifically target companies that are undervalued, in distress, and can be turned around or liquidated for more than the cost. PE isn't an exotic business philosophy. It is literally just a private buyer.
Although often to the detriment of customers as I have seen with several vets and my former dentist. Prices suddenly doubled and tripled or even more.
Earlier quoted context omitted.
Because, contrary to public belief, PE firms are skilled and sophisticated managers. Most deals are successful under their management, and this is why banks usually lend 70-90% of the purchase funds. They specifically target companies that are undervalued, in distress, and can be turned around or liquidated for more than the cost. PE isn't an exotic business philosophy. It is literally just a private buyer.
> PE isn't an exotic business philosophy. It is literally just a private buyer. With a complex tax-favorable structure, https://www.ropesgray.com/en/insights/alerts/2019/02/tax-iss...
I have the same question every time I see one of these articles. I think I've even posted the question in previous HN threads on private equity shenanigans. The question is: Why is this profitable? If the land is worth $1.5 billion, it should have cost PE more than $1.5 billion to buy the company. Then there would be no way to make a profit by selling the land, paying yourself, and letting the company go belly-up. Wh…
PE "vulture capitalism" is profitable because it takes advantage of vulnerable people who want to see their dream continue. and yes, the execs at $1.5bn companies can still be vulnerable people who want to accomplish something in the world.
the argument that PE firms are skilled managers only holds water if they actually turn the companies around and make them succeed. but more often than not they don't, they're burning things down to milk as much profit as they can before the end.
I have the same question every time I see one of these articles. I think I've even posted the question in previous HN threads on private equity shenanigans. The question is: Why is this profitable? If the land is worth $1.5 billion, it should have cost PE more than $1.5 billion to buy the company. Then there would be no way to make a profit by selling the land, paying yourself, and letting the company go belly-up. Wh…
because the people who have spend years of their life trying to build something , whether that's a brand, an experience, a product, whatever, have an emotional attachment to it and don't want to see it destroyed. so when they're struggling, the look for a lifeline. PE provides that lifeline as a cash infusion in exchange for ownership. PE "vulture capitalism" is profitable because it takes advantage of vulnerable peo…
Most people don't have experience on how to squeeze the last drop of value from a struggling company. And many don't know how to quantify the value either. So if the average corporate executive tried doing this, they might not recoup the full value than if they just sold to the "experts".