gedaliyahSep 29

TIL that Toys R Us wasn't killed by competition, but by private equity companies

https://lemmy.world/post/36627195

TIL that Toys R Us wasn't killed by competition, but by private equity companies - Lemmy.World

Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans. Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them. The same thing happened more recently with Red Lobster and JoAnn Fabrics.

Show threadRoopappy

I watch the YouTube channel “Company Man” that does a bunch of interesting business stories. 95% of the “Decline of (brand)” or “Rise and Fall of (brand)” videos are because of leveraged buyouts.

A group of idiots borrow billions of dollars, throw the unrecoverable debt onto the books, slowly killing the company, and then it’s dead.

Who loans this money? How does that work? I understand the rest of it about being a bastard who collects millions in salary and bonuses while driving a company into the ground. I just don’t understand where the money comes from, or why.

Sep 30 at 1:33amWeb
Show threadtesadactylSep 30

The best book I’ve read about private equity is called Songs of Profit, Songs of Loss by Daniel Souleles. It’s an ethnography of private equity.

Private equity is the logical extreme of the idea of shareholder value. Companies are bought, stripped for parts, and mined for resources. The money comes from wealthy people and institutional investors like university endowments, pension funds, etc, and some years it is a very high-return investment. Other years, not so much, see the relationship by the University of California and Blackstone as an example in recent years.

Show threadTehdastehdasSep 30

It may be U.S. plutocrat strategy to weaken political enemies by killing their companies.

Consider Microsoft destroying Nokia and their Linux phones to benefit fellow American companies Apple and Google.

Consider the Destruction of OkCupid as an attack against its liberal-skewed user base.

Destruction of OkCupid as an attack against its liberal-skewed user base - Lemmy.World

The destruction of OkCupid by Match Group [https://en.wikipedia.org/wiki/Match_Group] looks like a politically motivated attack against the minorities and intellectual power users who used to flock there. OkCupid used to be the best place to match diverse people. They crowdsourced thousands of multiple choice questions from which you built your search filter: - Which answers you accept - How important each is to you - Your answer for the other side of the match equation - Voluntary explanation The match results were factored into friendship, dating, and sex. “Friendship” contained ethics and communication style, so it also worked for business partnerships. Then Match Group bought it. For a while they let it be, but then they: - Removed the factoring - no more looking for friends or sex, only complete packages - Removed search - no more finding the best matches anywhere on the planet, now you just swipe like Tinder - Removed keyword search - no more finding niche interests not included in the questions, like “furry” - Removed the compatibility filter, replaced it with sameness filter - now everything has to be the same to match: both of you must have or not have tattoos for example, never mind what you like - two of my likes went from 99% and 95% compatible to 50% sameness (contradictorily, it still finds the opposite sex for heterosexuals) - Deleted the voluntary explanations of answers without warning, so no one could back theirs up - Deleted ~95% of the match questions without warning (~80% of popular questions), ~500 questions remain - Deleted all message histories - Deleted all accumulated likes, which were the best matching people around the world with maximal couple/friend/sex partner potential except, for example, location for now. They broke the profile links, so bookmarks became useless. - They delete likes without permission, without notification - They delete matches (mutual likes) if they haven’t been messaging in a while, as if that meant they’re not a match - no, they have a temporary problem, such as life situation - They block previously matched people that have been clicked “pass” on without notifying either party about the blocking. Once people appeared on my recently cleared block list (well hidden under “settings”) when I wasn’t using the site. - They show profile sections in the wrong order, so those written as a continuum won’t make sense. After liking and reopening the profile, the sections will be shown in the correct order. - They police inconvenient statements in the users’ introductions as the political situation evolves - the day after the mass murderer healthcare insurance CEO got shot, the section in my profile containing (for months) “fuck the healthcare system - make a better one” was deleted without sending me a copy to edit Plausibly deniable attack: “It’s just business.” Avoid dating services owned by Match Group [https://en.wikipedia.org/wiki/Match_Group#Dating_services_owned].

Show threadboonhetSep 30

Consider Microsoft destroying Nokia and their Linux phones to benefit fellow American companies Apple and Google.

I’ve considered it, but I do think it was a huge blunder that was planned differently. They invested a bunch of money in Windows Mobile, had a partnership with Nokia and then bought their mobile business… And then they just gave up, handling their competitors in other markets (Apple being a competitor to Windows and Google at the time being already a competitor to Office) a win. I suspect they actually had faith in Windows Mobile and wanted to fuck up Nokia and buy their phone business so they could sell Windows Phones.

Show threadDoomsiderSep 30

Oh it is real simple. Imagine you have a really nice truck that is all jacked up with a lift, big tires, light bar, supercharger, etc.

I want to buy it and you want $10k for it since it is an older model and most of it’s worth is from the accessories. The problem is I don’t have $10k. I only have $2k.

This is where the magic happens. I find some someone who will buy all your accessories for $8k. I make a deal, let me strip your truck and I will pay you $10k for it.

You agree and I come over, take off all the accessories and then sell them for $8k and then buy your truck for $10k.

The truck is pretty worthless at this point without wheels or anything, but I can sell it for about $3k. Well, I ruined the truck and made a thousand bucks. This is a silly example of how they get the money.