Elon Musk: Always A Douche

[Grey Fox]

I don't know how they can do something so obviously against the interest of a company and not face any consequences.

Who from?  They are the company.

It should be from the government. Alas, that's not how the USA operates.

[Valmy]

They did other "shady" things, I believe. Like selling property and leasing back to the company at inflated costs.

That's fairly standard in PE - one of the reasons it's bad.

And when they aren't doing that they are doing a leveraged purchase and making the company pay for it.

It's basically stealing. Legal theft. The customers lose a successful business, the employees lose their jobs, but a small number of rich assholes make billions.

It's all madness. Does anybody think this is good for the economy? To destroy productivity and employment and convert it all into cash to be used to destroy other companies? What are we doing? It is like somebody looked at 2008 and thought, "yeah, that's a good start."

[Admiral Yi]

Using a vendor you own with higher costs, in an industry with then margins to begin with,  doesn't scream fiduciary duty to me . And as RL went further and further into debt cost savings would be a first step. A step not taking in regards to this vendor.

I guess it could, in very trusting terms, be gross negligence; but that doesn't seem like a viable defence in any regard.

The part I'm having a hard time getting is why it would be more profitable for the PE scumbags to make an inflated profit on their shrimp for 12 months (or whatever) rather than making a less inflated profit on their shrimp for eternity.  IMO that's the one fact that needs to be demonstrated to uphold the intentional indictment.

[dane]

Using a vendor you own with higher costs, in an industry with then margins to begin with,  doesn't scream fiduciary duty to me . And as RL went further and further into debt cost savings would be a first step. A step not taking in regards to this vendor.

I guess it could, in very trusting terms, be gross negligence; but that doesn't seem like a viable defence in any regard.

The part I'm having a hard time getting is why it would be more profitable for the PE scumbags to make an inflated profit on their shrimp for 12 months (or whatever) rather than making a less inflated profit on their shrimp for eternity.  IMO that's the one fact that needs to be demonstrated to uphold the intentional indictment.

Because they make a larger immediate return and can then use that profit as capital to do the same to other companies. John Oliver has a roughly 20-minute segment on what happened at Red Lobster that gives some of the specifics.

[crazy canuck]

Using a vendor you own with higher costs, in an industry with then margins to begin with,  doesn't scream fiduciary duty to me . And as RL went further and further into debt cost savings would be a first step. A step not taking in regards to this vendor.

I guess it could, in very trusting terms, be gross negligence; but that doesn't seem like a viable defence in any regard.

The part I'm having a hard time getting is why it would be more profitable for the PE scumbags to make an inflated profit on their shrimp for 12 months (or whatever) rather than making a less inflated profit on their shrimp for eternity.  IMO that's the one fact that needs to be demonstrated to uphold the intentional indictment.

Most PE arrangements are fairly short term placements of cash in which the investors want the returns and cash out.  Five year terms are typical, some can longer.

So the who purpose of PE is one of two things.  Get in and strip all the value or make the company look pretty to sell to some sucker at an inflated price.

Red Lobster was the former.

These are not Warren Buffet buy and hold types.

[Razgovory]

Using a vendor you own with higher costs, in an industry with then margins to begin with,  doesn't scream fiduciary duty to me . And as RL went further and further into debt cost savings would be a first step. A step not taking in regards to this vendor.

I guess it could, in very trusting terms, be gross negligence; but that doesn't seem like a viable defence in any regard.

The part I'm having a hard time getting is why it would be more profitable for the PE scumbags to make an inflated profit on their shrimp for 12 months (or whatever) rather than making a less inflated profit on their shrimp for eternity.  IMO that's the one fact that needs to be demonstrated to uphold the intentional indictment.

The Private Equity firm, Golden Gate Capital sold Red Lobster to the Shrimp company.  They don't still own it.

[Admiral Yi]

Because they make a larger immediate return and can then use that profit as capital to do the same to other companies. John Oliver has a roughly 20-minute segment on what happened at Red Lobster that gives some of the specifics.

Link?  I googled and I'm getting endless clips about a fight with a Kingston bakery.

[Sheilbh]

Most PE arrangements are fairly short term placements of cash in which the investors want the returns and cash out.  Five year terms are typical, some can longer.

So the who purpose of PE is one of two things.  Get in and strip all the value or make the company look pretty to sell to some sucker at an inflated price.

Red Lobster was the former.

These are not Warren Buffet buy and hold types.

Yeah all PE funds are finite. You raise money from investors for a fixed period of time. The PE cycle is fund-raising, investment and then liquidation through exits.

Then as you say basically asset strip (sell off all the company's real estate to extract capital) or make it look pretty (normally by cutting costs and investments by the business) in order to maximise the exit. Neither of those routes are necessarily good for the company itself. But if your job is to maximise your return in, say, 5-10 years - those are probably the only ways to do it that quick.

[crazy canuck]

Most PE arrangements are fairly short term placements of cash in which the investors want the returns and cash out.  Five year terms are typical, some can longer.

So the who purpose of PE is one of two things.  Get in and strip all the value or make the company look pretty to sell to some sucker at an inflated price.

Red Lobster was the former.

These are not Warren Buffet buy and hold types.

Yeah all PE funds are finite. You raise money from investors for a fixed period of time. The PE cycle is fund-raising, investment and then liquidation through exits.

Then as you say basically asset strip (sell off all the company's real estate to extract capital) or make it look pretty (normally by cutting costs and investments by the business) in order to maximise the exit. Neither of those routes are necessarily good for the company itself. But if your job is to maximise your return in, say, 5-10 years - those are probably the only ways to do it that quick.

And increasing amounts of capital are going this route.

Which helps explain, to Jacob's point, a lot of the shareholder support.  Investors are looking at increasingly short term results rather than long term growth of a company.

[dane]

Because they make a larger immediate return and can then use that profit as capital to do the same to other companies. John Oliver has a roughly 20-minute segment on what happened at Red Lobster that gives some of the specifics.

Link?  I googled and I'm getting endless clips about a fight with a Kingston bakery.

https://m.youtube.com/watch?si=lYPDaTB2sn4NO5wX&v=oDJWD7021HI&feature=youtu.be

26:44

[Valmy]

So I think what upsets me so much about Elon Musks big payday is this is not just bad for company, yes it removes an entire nations worth of resources for products and services, but it also massively enriches and empowers and unelected and unaccountable man who has proven to be a dangerous maniac. This will help ensure he has massive power to control all of our lives in a totally unaccountable and unchecked manner for the rest of his life. Extreme arbitrary power for a few oligarchs is the ultimate creation of our economic system since 1980s. Exactly what the doomsayers warned us of back then.

So yeah.

[Josquius]

So I think what upsets me so much about Elon Musks big payday is this is not just bad for company, yes it removes an entire nations worth of resources for products and services, but it also massively enriches and empowers and unelected and unaccountable man who has proven to be a dangerous maniac. This will help ensure he has massive power to control all of our lives in a totally unaccountable and unchecked manner for the rest of his life. Extreme arbitrary power for a few oligarchs is the ultimate creation of our economic system since 1980s. Exactly what the doomsayers warned us of back then.

So yeah.

Silence commie.
Unrestricted wealth for the few is the American way.
If you don't like it then just move to Venezuela!

[Admiral Yi]

https://m.youtube.com/watch?si=lYPDaTB2sn4NO5wX&v=oDJWD7021HI&feature=youtu.be

26:44

This video is not available in my country.

[The Minsky Moment]

Most PE arrangements are fairly short term placements of cash in which the investors want the returns and cash out.  Five year terms are typical, some can longer.

So the who purpose of PE is one of two things.  Get in and strip all the value or make the company look pretty to sell to some sucker at an inflated price.

Red Lobster was the former.

These are not Warren Buffet buy and hold types.

There are also other attributes that can attract a PE buyer, for example a loss-making company may be purchased for the value of its tax attributes (e.g. net operating losses) - once those are harvested, the company can be killed off.  Back in the oughts, when retailers first were getting slammed, there was a spate of PE acquisitions where the PE firm would detach the owned real estate, declare an extraordinary dividend to drain whatever cash was left in the operations, and then file the company for bankruptcy.

[Razgovory]

Is that sort of behavior helpful economically?