Quote:
Originally Posted by smurfyou
I don't know if this exists anywhere else in the world, but here in the states we have "Private Equity" firms that are corporate vampires. They take advantage of various loopholes to control a company without regard for its debt. They quite literally bleed it dry and bankrupt it on purpose and somehow walk away with a massive profit.
So that's why it matters who owns a company. A PE firm is usually a sign of a death spiral.
Before anyone in the financial industry replies, I realize this is oversimplified but this is the result of a lot of these takeovers.
|
I am not in the financial industry. While it is certainly true that here in US PE Firms have presided over a number of spectacular and highly publicized failures ...But PE here in the US. According to last article I read ,,,It's not a matter of being "oversimplified" so much as not actually being completely accurate "
A PE firm is usually a sign of a death spiral" buy the numbers is not accurate . Now PE does involve a much higher failure rate (estimated to be about 20% as opposed to other refinance methods which average some 4 or 5 % failure ) While no doubt this considerably a higher rate, and has contributed to PE 's very bad reputation ..But in reality that leaves still the "
usual" not failing and often even growing in revenue at 80% Juss sayin'
Also the article pointed out that almost of of that 20 % failure involved already publicly traded companies already carrying debt and the PE increased that debt or the PE took over management and had little or no knowledge of the specific business None of which seems to be the case with this Sweetwater deal (Yet)
So What will happen remains to be seen..