Comment by Krutonium
8 hours ago
Private Equity vs Private Ownership
The first is a vampire looking to take what was publicly or even privately owned, extract every last dollar and leave the shell with the debt of buying the next victim.
Private Ownership is Valve or Porkbun - The people running the business want to make a profit but not to their own or their customers determent.
> The first is a vampire
I mean not always, but that does happen and that's what you hear about.
Is there a good example of a private equity buyout which wasn't based on that strategy?
My understanding is that there are private equity firms who have legitimate strategy and competency with turning around struggling companies.
Good examples have come up in fast food industry like Arby's and Buffalo Wild Wings.
Last paragraph on this article:
https://www.fershman.com/articles/private-equity%E2%80%99s-s...
This "vampire the company into a debt spiral" strategy is definitely not what happened in these cases, though we can argue about whether the end product is better or worse off for it. I'm certainly not lining up at Arby's, Dunkin, or Buffalo Wild Wings. Still, I think that question is essentially irrelevant to the topic at hand: this is a private equity firm that's legitimately trying to make the company healthier on business fundamentals.