Comment by dangus
4 days ago
Simultaneously, the fact that anyone with any supposed business experience gifted that priceless level of ranking would decide to shut down the business is insane.
Like, the fact that someone is making money off of MySpace.com right now and Anandtech couldn’t swing it makes zero logical sense. To me it feels like they tried nothing and were all out of ideas.
But that’s private equity for you.
I’m still upset Rakuten shutdown fatwallet. Those forums were the best.
https://en.m.wikipedia.org/wiki/FatWallet
Any time private equity does something stupid or short-sighted, remember this:
Private equity firms - or, at least, the ones that people complain about - don't own their own capital. They have to rent it from somewhere else, and those people get paid first.
The PE firm only really gets paid for their expertise when they make their hurdle. Ergo, PE is incentivized to make terribly short-sighted business decisions, because those are the ones that will bring in the money to make their hurdle. They get caught in a loop of buying and gutting otherwise productive businesses.
This capital structure made sense back when PE was a tiny part of the economy that bought and modernized small businesses, but now PE is more akin to a failing empire; with an entitled aristocratic class that will shiv any leader that tries to change the structure to be more sustainable. They are spending $2000 on candles and the candles have knives.