Correction: It has come to my attention that Red Lobster was sold a few days ago to new owners and has exited bankruptcy. Sorry for failing to include this very important update.
@rpm773
Күн бұрын
So, endless shrimp is back on? I'll get my fork
@swaggery
Күн бұрын
Yay, I can still eat 16,000 calories in one sitting and sleep at the table.
@stefthepef
Күн бұрын
HERE FOR THOSE BISCUITS LIKE MY NAME WAS FRED DURST
@averagewhiteguy2
Күн бұрын
Filing bankruptcy just to get out of paying a pension liability, and re-purchasing the company is just so scummy. That's abominable.
@samsonsoturian6013
Күн бұрын
If they don't have the money, they don't have the money
@TiredBush
13 сағат бұрын
@@samsonsoturian6013 Yes, but the problem is private equity choosing to get out of the situation using a method to the heavy detriment of other stakeholder groups - the employees (which can arguably be classified as vulnerable), consumers (which are vulnerable when talking about the healthcare industry) and perhaps the corporation itself.
@U4ricBlues
12 сағат бұрын
It is beyond scummy, it SHOULD be criminal and illegal. Somehow you can't discharge college debt in bankruptcy, but you can wipe clean a benefit someone spent much of their life creating. Companies should be required to fund pensions to a sustainable level, just as banks have to keep reserves. That and pensions should be first in line when paying out, before bond or stock holders. One is an investment, the other is someones livelihood. The fact that this is not the case an embarrassment. The all-American mix of regulatory capture, politicians being swayed by money, and predatory capitalism.
@hypothalapotamus5293
10 сағат бұрын
It should be illegal to take huge risks, distribute the consequences of the risk to a bunch of other people, and then hoard all of the benefits... but aparently, it is not.
@maxweinbach3996
10 сағат бұрын
Not sure about the US, but that is not how it works in Canada. The courts will rank creditors, and taxes and payrolls are high up there.
@jamesodell3064
Күн бұрын
Bankruptcy courts should be allowed to claw back money private equity firms have stripped out of companies.
@samsonsoturian6013
Күн бұрын
Most PE firms can't do that, and even so judges recognize affiliated entities
@cisium1184
Күн бұрын
You don't actually know anything about bankruptcy, do you? You just heard someone say that and it sounded good. News flash: _clawing back money is half of what bankruptcy courts do._ It's like saying "pies should contain crust," as if crust were some underappreciated component of pies that cookbook writers had never thought to mention. What luck! We were having trouble making pies, and you saved us! 😉
@jamesodell3064
Күн бұрын
@@cisium1184 I know they often claw back money but they do not do it when private equity strips companies of their assets and then sets them loose and a couple of years later go broke and have to declare bankruptcy.
@sor3999
Күн бұрын
@@cisium1184 Really smug are you? You actually don't know how they hide away assets from a bankruptcy do you? The reason why it's called "vulture capitalism" is because they strip the company for parts, sell it to themselves through web of phony shell companies to protect from it being claimed in bankruptcy. Case in point: Red Lobster's real estate was sold off (at a discount of course) and then leased right back to them. There's no reason to do that unless you planned to tank the company and move the assets off it's books.
@lonyo5377
19 сағат бұрын
@@jamesodell3064then the lenders should learn a lesson not to lend to those investors, because lenders are usually the biggest losers in bankruptcy
@proy3
Күн бұрын
You know PE is bad when even The Bagel Man is like "Yeah... the populists have a point."
@samsonsoturian6013
Күн бұрын
Liar
@lookoutforchris
23 сағат бұрын
I’m reminded of Warren Buffet’s comments on Private Equity: close to fraud.
@vonb2792
11 сағат бұрын
@@lookoutforchris fun fact... Buffett company "Berkshire" is a private Equity firm lol.. they own more private compagnies than public stock (which Buffett is famous for). They are like the White knight of that world
@sav8976
Күн бұрын
I like how he casually just says "saddling the debt" onto the already declining business like thats not messed up.
@ophthalmophobicnpc8002
Күн бұрын
Should 100% be illegal to do that.
@arronalt
Күн бұрын
he is so nonchalant saying it but I legit lost my sh# hearing it
@SolomonTibbey
Күн бұрын
@@arronalt, you understand investors sell their stake to allow this to happen, right? This is often a company's only choice as they are already heading towards delinquency.
@samsonsoturian6013
Күн бұрын
It's called a ponzi scheme
@aeroandspace
Күн бұрын
@@SolomonTibbeywell leveraging debt against the company can surely raise the offer price beyond what an investor would expect, rise
@KathyClysm
Күн бұрын
I think the problem largely is not the fact that private equity exists, but that they are getting involved in sectors that should really never have been privatised in the first place. Nursing homes, hospitals, prisons, public transport, etc. should never be a "for profit" type business as they are a public institution/service/etc.
@BasicUniversalEconomics
Күн бұрын
governments are just as bad, only a little more held responsible for their bad practiced
@franknuzzo2576
Күн бұрын
Funding things through voluntary means is much better than funding things through coercive taxation. Don’t be a useful idiot.
@grumioiscool6190
Күн бұрын
Yeah from what people say, you would think that everyone would have free homes if blackstone stopped existing What’s stopping more people having homes isn’t just one “bad”company and pretending that the reason is doing more harm then good
@IMS-4
Күн бұрын
@@grumioiscool6190THE GOVERNMENT!!!!
@water2770
Күн бұрын
I mostly disagree. For sure if you want the government to provide their own version then that's fine, but you want to have competition to drive better products and/or lower prices. Haven't done that much research into nursing homes, and prisons are somewhat unique since they require government to function at all, but it feels like most of the issues with hospital/medicine prices along with public transportation has been the government meddling so much that I can't put the blame on open markets. And if a major issue with the way these private industries are being handled is government regulations/interventions I don't see how giving the government more power is going to help the problems.
@ieuanhunt552
Күн бұрын
Leveraged buyouts are pure insanity. A private equity firm can take out a loan. Buy a company. Then saddle that company with most of the dept from that loan. Insanity
@Liverpoolaussie21
Күн бұрын
A mortgage is an LBO… . Company’s have optimal cap structures. No harm with LBO’s
@tmallot
Күн бұрын
@Liverpoolaussie21 I feel that is a false equivalence. In a mortgage there are 3 parties, seller of a house, buyer of a house, lender to the buyer. The lender takes the risk up front, the buyer slowly pays back that risk over time, seller get most of the house value. In an LBO, the buyer is a PE firm, the seller is "a collection of shareholders" who own the company, and then there is the lender, once again a bank. But the employees are the tenants of the house, who have no say in the matter. This is a landlord buying up a tenement building to raise the rent on everyone who works there, and doing so with only a 10% stake.
@samsonsoturian6013
Күн бұрын
The loan is on the owner, not the company
@Yura135
Күн бұрын
@@Liverpoolaussie21 only if I could take out a 1.5 million mortgage on a million dollar home, pay myself 500k. strip the wiring, sell it, pocket that too. then restructure the loan so that the home has to somehow pay its own mortgage, while I am free to pocket my winnings and do it all again.
@sor3999
Күн бұрын
@@Yura135 Or buying a car, stripping it for all it's valuable parts, don't pay the car loan and let the bank repo what's left. Though I guess your credit will go to shit really fast, I wonder does the same happen to these private equity firms if they pull off this vulture capitalization over and over? I'm pretty sure if I default on my car loan my credit will tank and I won't get another car loan.
@Zilkat
Күн бұрын
When even The Plain Bagel piles onto PE without really having anything positive to say, you know it's just a bunch of bloodsucking thieves. To me, it sounds like the leveraged buyout is basically a legal way of butchering a company. While the current owners cannot liquidate the assets and take the money (that would be embezzlement), what they can do is sell it to PE, who saddles the debt for the buyout onto the company and absorbs it by liquidating its assets. At the right price, both the previous owners and the PE firm win, while everyone else at the company (shareholders and employees) loses.
@stevenglowacki8576
Күн бұрын
Embezzlement is when management takes the company's money. The owners can take the company's money no problem. It's their money.
@clarkeysam
Күн бұрын
A company I previously worked for was bought by a US private equity firm. We thought it was strange, as they usually bought struggling retail companies and tried to turn them around (Pizza Hut, American Golf, etc) but we were not a struggling company or a retail company. We posted profits every year and we were in the oil industry. They bought us for $4m (which was low, due to our accounts not being audited, they were audited at the parent company level). In the first year we made $40m profit and then they shut us down and ran away with the money!! 100 people lost their jobs, some of which had worked for the company for 40 years!
@michaelborst5476
Күн бұрын
Not saying this is BS, but something isn’t adding up. Why would they just “shut down” such a profitable investment? If it’s as you say, and they made 10 times their investment back in only the first year, why wouldn’t they keep that cash cow going? Or at least sell it for a huge return on the initial $4MM? Makes no sense that they would just turn off the lights and walk away.
@Quicksilvir
Күн бұрын
Private equity did that to my grandmother's company. Ended up driving them to the brink by selling off their assets to another holding. It's still around today thanks to ruthlessly cutting expenses (aka employee jobs and benefits). Corporate histories today just gloss over that period🙄.
@FordFourD-aka-Ford4D
Күн бұрын
@@michaelborst5476 To *write off* the *imaginary losses* and keep more money overall. It's the same reason that landlords of retail spaces would rather raise the rent so high that a store has to close. On paper they make more money writing off the loss every month of the new artificially inflated rent than if they continued to actually accept less rent. (There's a certain ratio of vacant to filled units that is more optimal than 100% tenancy, depending on your location and your cash flow.)
@timedone8502
Күн бұрын
@@michaelborst5476it is BS as simple as that.
@samsonsoturian6013
Күн бұрын
Those numbers are some level of bullshit. No one is posting profits 10x market cap.
@keylanph
Күн бұрын
The issue with PE firms and single family homes is that they are purposefully driving up the prices through unfair business practices. Both PE firms and high net worth investors are buy multiple homes in a neighborhood at market rate or maybe even under rate because they pay cash and then they’ll buy a couple homes at 15-20% premiums. That causes the comps in the neighborhood to skyrocket. It is market manipulation and it’s monopolistic on a local scale. The fact that they can then 1031 exchange those properties and pay no tax on the gain is why homes have doubled in price in half a decade. I work in real estate and I see this on a literal daily basis. Maybe 30% of the homes I work with are actual buyers who plan to make it their primary home. Paying for a home in cash makes a 500k home cost 500k. But a normal person using a mortgage would end up paying north of a million over 30 years for the same home. We need to remove the 1031 exchange for corporations, LLCs or any other business and we need to make taxes on real estate sales that aren’t a primary or secondary residence exponentially higher.
@jameskeefe1761
Күн бұрын
Oh i dont know, perhaps buying a company with its own debt then to bleed it dry and extract as much as possible from it as possible, screwing over its employees and customers, to make a few wealthy people who own it wealthier, is a little bit vile. Its contrary to how publicly traded companies should be run which is to make the company more successful, so that the public who can buy shares and benefit can grow their wealth by the companies success rather than by bleeding it dry.
@desiv1170
Күн бұрын
Blackrock/Blackstone: We just don't see why people have so much of a negative initial reaction to us... Consultant: Could be your names... They are a bit dark/goth sounding... Have you considered some other names that are a bit more bright? Blackrock/Blackstone: We could go back to the names we were going to start with... Consultant: Great... What are those? Blackrock: Blackheart... Blackstone: Blacksoul... Consultant:
who would invest in "Pinky Promise We Will Pay The Loan" private equity company?
@geldan
Күн бұрын
Because they've bought out all of the veterinarians in the area and increased prices 5x+ while severely reducing the quality of care.
@samsonsoturian6013
Күн бұрын
Liars get scalped
@rmo9808
Күн бұрын
There's a couple companies currently gobbling up all the veterinary clinics. They are paying more than they are currently worth just so they can turn around and do this.
@carterwgtx
Күн бұрын
I don’t think it’s that private equity exists - it’s that private equity moves into otherwise perfectly fine businesses and switching the entire business into a machine to extract profit to the benefit of the equity firm. Away goes any care for workers, the community, broader society at large, the environment, and even their customers. Upon PE acquisition nothing matters except the bottom line and everything simply boils down to lines in the spreadsheet set up to maximize the next quarters profits. People hate them because they are the classic men in suits who show up with a checkbook and immediately start running the town.
@carterwgtx
Күн бұрын
Oh and did I mention it’s really only people who are already ultra wealthy who invest in PE firms? And oh yeah, they’ve lobbied the government to get extremely preferential tax treatment. They have turned into a major source of inequality in our society.
@PXAbstraction
Күн бұрын
Almost like big business can't be trusted to regulate itself. 🤔
@samsonsoturian6013
Күн бұрын
Found the bum
@PXAbstraction
Күн бұрын
@@samsonsoturian6013 Found the dumbass.
@Seth9809
Күн бұрын
You think?
@Erok9
Күн бұрын
The difference between creating wealth and simply extracting it.
@samsonsoturian6013
Күн бұрын
It's called a ponzi scheme
@sor3999
Күн бұрын
Which is basically stealing. They are thieves.
@aygwm
19 сағат бұрын
Just another way to “juice” the system 🧢
@JD-fd1rl
14 сағат бұрын
Bingo. They largely operate a zero-sum game. For them to win, others have to lose.
@aeroandspace
Күн бұрын
One of my closest friends lost her job due to the private equity albatross. She had trained her coworkers in her skills, her job was verifying that new antennas could be safely added to cell towers, which meant that she was the most highly paid person at her skill level. Naturally, when the PE firm started squeezing the engineering firm for this-quarter cash, she was dropped. From what her friends still there told her afterwards, she may have actually been lucky. To get out when she did. At the very least, though, she learned the lesson to not uplift her coworkers, even if her job seems secure at the time.
@karlstrauss2330
Күн бұрын
Corporations used to view employees as investments for long term growth, innovation and success. Thanks to delusional and myopic MBA grads they view employees as pricey liabilities.
@carpelunam
Күн бұрын
damn the classic "training your replacement"
@AnneDunning-s3c
Күн бұрын
I firmly believe in raising skills of all around me. If I continue to learn myself, I will always have something new and unique to add. If management sees me as redundant, that management was only going to impede the future potential of what I can do. Separation from such management is a disguised gift. That said, separation is still painful. My heart goes to your friend for the pain of separation. My joy goes to her for the potential she has unlocked for new future paths.
@stefthepef
Күн бұрын
That's just such a depressing takeaway, though. I don't know where I'd be without the mentoring of more senior coworkers, and I find it really fulfilling when I can pass what I've learned on to new people. Then again, I got cut from my PE-owned company as one of the higher-paid writers on staff where I was doing just that. The cowards never explained why they cut who they did, but I feel like it probably had to do with me pushing for higher pay that would bring me in line with senior employees at other companies vs. anything I did to help coworkers do their jobs. Higher-paid employees already have a target on their backs the moment a PE firm steps in. Further proof that private equity firms can destroy everything, I guess - even our ability to help each other learn new skills at work. It's all just beyond depressing.
@gwky
Күн бұрын
@@AnneDunning-s3cnot everyone can afford to be let go, especially in this job market.
@AmericanBusinessNews
Күн бұрын
Many private equity acquisitions involve saddling companies with significant debt, leading to financial instability and a higher likelihood of bankruptcy
@agsbxnskqbwjakq
Күн бұрын
I dont really care on paper, its the loopholes that allow harm is the problem. This should be regulated better so people dont die so random guy somewhere whose already wealthy can make a extra buck.
@samsonsoturian6013
Күн бұрын
These guys aren't rich. The fund managers are wallstreetbets guys who leverage to the tits by investing other people's money. The investors are sometimes rich, but a lot of these firms will take investment online which is of questionable legality. It's called a ponzi scheme
@ap9929
Күн бұрын
The returns appear good because a lot of them are not risk-adjusted and a lot of them don't consider leverage. Once adjusted for those, the return differences aren't material. The low volatility is a lie, it just looks that way due to liquidity smoothing. I worked in PE for a year and couldn't stomach it. Most pitches were about expanding the multiple through layoffs and BS synergies.
@DesertObserver491
Күн бұрын
Shows you have a heart. These people are just heartless. Greed over the greater good.
@laturnich9507
Күн бұрын
@@DesertObserver491 Or just willfully ignorant. I work in accounting and have had some PE clients. The general sense I get is that most of these people don't really think critically about the impact of what they're doing. When you're just sitting in an office building in New York you're so far removed from the reality of that stuff that you really don't have to think about it if you don't want to. And why would you want to when it's so much easier to just smile for the client, make number go up, and collect a pay check. I don't doubt that there are some sociopaths in the mix who understand exactly what they're doing and just don't care, but I think the vast majority don't even get that far and are just oblivious or rationalize it somehow.
@SangoProductions213
Күн бұрын
I think the lack of liability for loans taken is the most scummy part of everything.
@SangoProductions213
Күн бұрын
Who are the ones putting down loan plans that are getting passed to the subsidiary business? It seems like an unusually risky prospect, given part of the business plan is bankruptcy.
@samsonsoturian6013
Күн бұрын
That's the definition of equity investment. All the risks are on the lender. That's fine when you're lending to blue chip firms, but your average startup......
@johnroberts3824
Күн бұрын
I lost a 17 year job as a result of a private equity acquisition. They ruined the company and eventually bowed out, and the company is now owned by the banks. It's a mere shadow of what it once was. Many jobs were lost.
@arjunkhanna7383
Күн бұрын
Thank you for giving insight into PE! This topic seems to attract a lot of confusion about what PE is. Also, I know I am late, but congratulations on speaking with the Canadian PM! An amazing milestone!
@CreepahKillahRSA
Күн бұрын
It seems to me like leveraged buyouts should not be legal in their current form. Saddling a company with debt used to buy it makes no sense.
@IndexInvestingWithCole
Күн бұрын
Why not?
@CreepahKillahRSA
Күн бұрын
@@IndexInvestingWithCole Because the risk associated with a loan should be held by those taking out the loan. Allowing the borrowers to exit the loan without consequences is a perverse incentive.
@Ollig999
Күн бұрын
I’m curious who is lending and at what rates for these leveraged buyouts. It seems like a really risky loan to say the least
@RR-et6zp
Күн бұрын
@@CreepahKillahRSA your comment applies to everything in life. Responsibility comes with authority, results come with risk etc. People always want to dance around and separate them
@135k
Күн бұрын
@Ollig999 notice how Private Credit is one of the fastest grpwing asset classes in the past 5 years? *hint* they're related **
@addanametocontinue
Күн бұрын
Pre-PE, you might have gotten a $5,000 raise a year because the company does well and they appreciate loyalty. When PE comes into the picture, fuck that, they pay you the market rate and nothing more--who cares that the company made tons of profit the prior year, the company's profit belongs to the company, not you. Am I biased? No. I worked at a company that was acquired by PE and got taken public and I was given a good number of shares to stay during this period. So, I made a good amount of money, thanks to PE, but there's no question the company is no longer the nice place to work at that it used to be.
@jayzee4097
Күн бұрын
We need a government that isn't afraid regulating industry will tank the economy.
@notting2640
Күн бұрын
Your mistake is thinking that they are afraid. They aren’t afraid, they are in cahoots.
@strings1586
Күн бұрын
America is not a communist country.
@Echelon030
Күн бұрын
The regulators are almost totally captured by the industries they're supposed to regulate. They routinely impose regulations on industry, but it's onerous bullshit meant to choke out small businesses, because only large companies can absorb the cost of compliance.
@timedone8502
Күн бұрын
So you admitted that PEs actually help growing the economy and regulating them would tank the economy?
@samsonsoturian6013
Күн бұрын
This idiot thinks rich people can do that
@jk_22
Күн бұрын
Because we have or know people who have worked at companies acquired by private equity firms
@karlstrauss2330
Күн бұрын
“Private equity don’t inherently need their companies to succeed to make money… there’s not much financial liability that the funds face for their company failings… companies are often to able to dodge responsibility for the actions of the company they effectively run.” There you go Plain Bagel, now you know why so many people distrust private equity.
@Fireclaws10
17 сағат бұрын
My problem with private equity is that they’re allowed to do leveraged buyouts, which is insane, and mostly lead to the death of the company they saddle with debt. Also that they aren’t regulated on the industries they can take over. As you’ve pointed out, they have disastrous effects on healthcare. They need rules, instead of being able to operate in a wild west of strapping a company with insane debt, firing half the employees, and ruining the pensions of the rest when it inevitably fails. No risk and no consequences.
@Dan-uo9fw
23 сағат бұрын
Some of the strategies you described as being problematic are straight up evil. Intentionally destroying the livelihood of other people.
@froseti1524
Күн бұрын
No "stay safe out there" outro = no private equity is safe confirmed
@LOLSflint
Күн бұрын
new video to watch while eating lunch just dropped
@frequentfrenzied
10 сағат бұрын
A private equity firm bought the local high-speed internet provider in the town where I lived. After the acquisition, they did exactly what you explained in the video. Fired almost all of the staff, sold anything of value, and stopped all maintenance on the internet infrastructure that allowed them to deliver service to their customers. They were the only game in town when it came to high-speed internet, so customers were forced to stick with them even though their service was essentially non-functional. That's just the way it was for six years, until another local internet service provider got the funding they needed to build out their service into town. As soon as that happened, everyone switched to the new service provider that was locally owned and operated, and the PE firm sold the old internet service provider that they had looted to the first company that was dumb enough to put in an offer for it.
@Icecapefrost
Күн бұрын
Market concentration and consolidation's downsides are all exponentially magnified by private equity firms. New examples of this come out every week and only a fraction gets reported on business news beyond city level so we can't grasp the true impact's scope
@davidbentley4731
Күн бұрын
Terrific videos. I work right in the middle of all this and this is a very thorough analysis.
@niravsavla1470
Күн бұрын
I think when Mike Ross(from suits) joined a private equity firm, I saw how soul-less they can be, lack of regulation, and PE firms able to lobby and use lawyers to get their way around is the major problem
@DesertObserver491
Күн бұрын
It was good peek indeed but it'd be great to know how much of it is accurate. Wall Street was a simpler display of what these guys do. Just looking for cash pots, usually at the expense of people.
@samsonsoturian6013
Күн бұрын
Not sure how good Hollywood is at depicting these guys, but in the interviews I saw these guys appear to sexualize wealth. They're young men who want to get rich quick, have fancy degrees, but have no idea what they're doing
@niravsavla1470
22 сағат бұрын
well hollywood might have tendencies to over-exaggerate stuff and go with the populist opinion, but in this particular case about PE firms looking to make a quick buck, while not caring about absolutely anything, i thought that scene contained some level of truth
@Elemblue2
Күн бұрын
I haven't watched the video yet. I would just like to respond to the title and confirm that I hate private equity. The ability to detach responsibility from debt but still take in cash flow isnt a financial vehicle. Its called robbery.
@Yura135
Күн бұрын
"detach responsibility" that's basically what is wrong with the whole system. everything that happens in "the economy", from layoffs, to bankruptcies, to supply chain issues and rising prices is a result of decisions made by someone in a room somewhere. but the system has been designed to insulate the decision makers while pushing the consequences onto everyone else. it need to instead diligently figure out who exactly messed up and doll out consequences: remove bad decision makers from decision making etc. every social/economic problem has to come with a set of people who are responsible for it, and the bigger the problem, the higher up these people have to be.
@sor3999
Күн бұрын
Exactly, they don't create wealth or value, they "extract it" i.e. exactly what a thief does.
@h.ar.2937
Күн бұрын
I’ve worked on fund admin side of things with private equity firms and they are a pain in the butt to deal with😂
@Lhorez
Күн бұрын
Private equity’s main goal is to increase return to investors by increasing revenue and reducing costs. And they will take any legal means to do so. They’re not immoral. They’re amoral. They really can’t consider the consequences of their actions unless it directly affects their bottom line. They’re at least two steps abstracted from seeing what they do. It’s a feature of laissez faire capitalism unfortunately. People don’t know how to put on effective guard rails on it yet so these things will continue.
@Lonovavir
Күн бұрын
Because the Doctor's Office went from having 4 Doctor's who could prescribe opiods to 2 and people now to have to schedule appointments 6 weeks in advance when it used to be 2. Any other silly questions?
@daarom3472
Күн бұрын
literally paying 18K a year for child care in the Netherlands (2 days a week) because the government liberalized it and its now owned by private equity.
@stonekidman2306
Күн бұрын
You gotta ignore those GameStop people, they’re basically stock market Qanon
@IndexInvestingWithCole
Күн бұрын
There’s no difference
@sor3999
Күн бұрын
Dan Olson, who did Line Goes Up, also did a video on the whole GameStop thing post-crash and man, it is a literal secular cult.
@maciejgrenda216
18 сағат бұрын
@@sor3999that was really shocking
@dmcarstensen
23 сағат бұрын
Sounds like the few success stories of PE companies saving some failing companies doesn't nearly overcome the amount of damage the other do.
@caddyshack68
Күн бұрын
I hate them because they are an exclusive club that don't allow people in. I am referring to work opportunities. You could throw investment bankers in here as well.
@eddenoy321
Күн бұрын
' It's a rich mans club, and you ain't in it." - George Carlin
@caddyshack68
Күн бұрын
@@eddenoy321 You get in a couple different ways. You know someone or are family member of someone already in it. You went to the right schools, got the right internships and met the right people, you are rich already or are a operational partner. If you are a freshman in college going to UGA or a place that's not top 25 for education go be something else...the odds of you getting in are very low. You would have a better chance at being a dentist or doctor if you have a strong work ethic and can pass the courses/do well on the entrance exams.
@Secret_Takodachi
Күн бұрын
Because it's neither private nor is it equitable. It's short-term value extraction at the cost of others. Sorry was I supposed to use bigger, fancier words to describe the situation?
@samsonsoturian6013
Күн бұрын
Very ponzi
@smacktalk964
Күн бұрын
i think right now in generally.investing has an accountability curve to it where there’s a huge disconnect in between who owns what and who’s accountable for what. Private equity is near the top where they have major controls or abilities and the players are few and far between. Where as for mutual funds, everyone can be a player but the levels or accountability for the actions is near zero where mutual funds do not have as much leverage or capital influence because they are the market.
@magalengo
Күн бұрын
Best description I heard of L.B.O. firms, if the acquired company fails the lbo firm does great, if the company succeeds they do even better.
@PahaLukki
Күн бұрын
Private equity sounds like everything "wrong" with investing, capitalism and management. All the classic "bad owner" vibes there.
@samsonsoturian6013
Күн бұрын
It's called incompetent greedy bastards, like most of the people that spread hate about them
@zmack1830
Күн бұрын
A legend demystifies private equity!!
@morkzorckerborg5000
Күн бұрын
generally speaking, brand groups race to the bottom cost sacrificing quality and service while charging a premium for a brand name. normally this would be fine as their short term financial gains would result in long term losses in marketshare to competitors who maintain some level of quality; however us law does not prevent monopolies or duopolies as one would think, the companies are usually competing against their own brands. another reason we are all doomed is bankruptcy pays out debt largest to smallest in full, not an average; so holding companies will buy a brand to bankrupt, pay themselves leaving other investors high and dry.
@mscotthowell1
Күн бұрын
There are many public pension funds invested in these companies. I don't care how they carry out their private business affairs, as long as U.S. taxpayers are not forced to bail them out.
@easyBob100
Күн бұрын
Public companies, private companies, it will never matter. People will always be tricked by those who want more control.
@tmallot
Күн бұрын
I don't hate them for taking away my endless shrimp. I hate them for giving out endless shrimp to funnel money to fishmonger holdings at the expense of a decent restaurant. I need my biscuits!
@stefthepef
Күн бұрын
For real. Red Lobster became Pink Shrimp due to the overwhelming amount of shrimp on the menu, and when that scheme was uncovered, it was the least surprising thing ever to me. I never went for the Endless Shrimp - just not a big shrimp fan - but I will admit to missing the tiny shrimp on the starter salads. That was rad, and they stopped doing that sometime in the late '90s or early '00s, I think. I'm still mad about that.
@Kornheiser10
14 сағат бұрын
Investor Beware is the caveat for PI or really any investment. Many of these public companies need private investment and turnaround. A lot of misunderstandings about PI, but these types of episodes are helpful as a primer to the issues.
@lesdickson9765
Күн бұрын
I'm not sticking up for PE in anyway [as there are some investors that don't always know what they're doing when they acquire businesses] but I think part of the hate is misdirected imo, some of the people who talk about PE have a fundamental misunderstanding of what it is. People talk about this like it's a conspiracy theory, and that's what I don't like.
@TheFounder_Diary
17 сағат бұрын
The use of leverage in private equity transactions can amplify returns, but it also increases the risk of financial distress. It's crucial for investors to understand the potential drawbacks and carefully evaluate the risks associated with private equity investments.
@benoithudson7235
9 сағат бұрын
Kudos to being able to spend an entire video without pointing out that Toys ‘r Us Canada came out fine and it’s really just the U.S. that has a problem finding toys.
@Nope_handlesaretrash
Күн бұрын
When you get big enough you completely escape any natural market force checks and balances. Monopolies shouldnt be just based on market share but aimed towards fiscal capture too.
@IndexInvestingWithCole
Күн бұрын
My favorite part of private equity conspiracies is people who say it’s a conspiracy because they have massive amounts of money but nobody ever talks about them and they’re hidden. But then they have public websites you can go to and read all about them, it’s just boring so they personally never heard of them.
@Sean_neaS
Күн бұрын
This comment is a lesson in logical fallacies.
@alexcipriani6003
Күн бұрын
@@Sean_neaSthat’s true 😂
@kyledennis2564
22 сағат бұрын
This deserves a videogame lol, be a PE owner, born to a poor family, and target only the rich as a form of revenge against greed, escalating luxury property prices while backstabbing rich investors and evil companies with debt scapegoatting and fees.
@greenredblue
Күн бұрын
I'd be very curious to know why leveraged buyouts shouldn't be illegal.
@EmilNicolaiePerhinschi
19 сағат бұрын
the main problem with PE is the managers often don't understand the business the companies they bought are in
@gargab2714
10 сағат бұрын
Almost confused Blackstone with BlackRock. Would love to see a video on the differences and similarities between hedge funds, private equity, and asset management firms.
@RachelCrandall-c1e
23 сағат бұрын
*Amazing video, you work for 40yrs to have $1M in your retirement, meanwhile some people are putting just $10K into trading from just few months ago and now they are multimillionaires*
@NicolasFar-u7b
23 сағат бұрын
Waking up every 14th of each month to 210,000 dollars it’s a blessing to I and my family… Big gratitude to Maria Frances Hanlon🙌
@Timmy-d5h
23 сағат бұрын
Hello , I am very interested. As you know, there are tons of investments out there and without solid knowledge, I can't decide what is best. Can you explain further how you invest and earn?
@derrekm1317
23 сағат бұрын
Same, I operate a wide- range of Investments with help from My Financial Adviser. My advice is to get a professional who will help you, plan and enhance your management skills. For the record, working with Maria Frances Hanlon, has been an amazing experience.
@LeeNelson-c9q
23 сағат бұрын
YES!!! That's exactly her name (Maria Frances Hanlon) so many people have recommended highly about her and am just starting with her 😊from Brisbane Australia🇦🇺
@EJAbeyta
23 сағат бұрын
Hello how do you make such monthly?? I'm a born Christian and sometimes I feel so down 🤦♀️of myself because of low finance but I still believe in God
@CatsMeowPaw
21 сағат бұрын
Ah, private equity. Such noble creatures. Buy out an existing business using debt, load that debt onto the business, strip it for assets, furiously cut costs, and sell it to someone else before it blows up. If the private equity group is upset about how people perceive them, perhaps it's time to change their ways?
@alexmcnabb7957
Күн бұрын
I think this sort of thing is hitting ski hills especially hard. Since it's so difficult to create new ski hills, there's a pretty limited supply. Reducing investment into lifts, runs and maintenance or increasing ticket prices doesn't really reduce demand, because supply is so limited. This makes it the perfect candidate - customers are going to stay even as service gets worse because they don't have another option. Additionally, it doesn't seem to get as much negative press because it's considered more of a luxury sport, it's not an essential need like food or healthcare. Watching Fernie stagnate as other hills expand and improve makes me kind of sad it's owned by RCR. I'm not sure if that really counts as private equity in the general sense, but I think it does.
@CountJeffula
Күн бұрын
And they will be baffled when the ski lift fails and kills everyone on it, knowing that their decision to cut maintenance expenses for many years was a direct precursor to the tragedy.
@raosiddharth4726
Күн бұрын
Again came here to white wash the evil stuff from finance.
@samsonsoturian6013
Күн бұрын
He spends the whole video proving these guys suck at their jobs
@raosiddharth4726
Күн бұрын
@@samsonsoturian6013 the literal thing is now he is coming to tell they suck, but for the housing thing, he said it was nothing.
@calebplumleeoutdoors
Күн бұрын
Because we should dislike flippers. Buying something (or hoarding), rebranding it, and turning it for a profit isn't very honorable work. It only inflates costs (look at housing). Meanwhile, to ensure max profits, they fk over their employees and gut the companies down to bare minimum. What a lousy thing to do for profit... couple people get rich while leaving a trail of frustration and destruction and rarely is any actual value added
@Slide61
13 сағат бұрын
Turn around failing companies? 😂 A LBO firm took over a highly profitable sustainable yield lumber company in my home town. They owned all their land. 10 years later it was gone along with 2500 jobs, the land, the trees, and the personal and corporate tax base. PE increased the logging rate 10 fold. They sold everything - including the kitchen sink. Multiply this by tens of thousands of companies. Is it any wonder we have a budget deficit?
@alejandrooceguera4656
Күн бұрын
The faces Mr.bagel makes when talking about Private Equities tells so much
@Slide61
13 сағат бұрын
Should be 'Equity Extraction'. It works when the debt is cheap and you don't have to roll into a higher interest rate environment.
@Obsidi0n
Күн бұрын
Richard Coffin is the coolest name ever
@lastspring
Күн бұрын
Saw a statement about PE firms. In the beginning, the GP has experience and the LPs have capital. After the fund closes, the GP has the capital and the LPs only have the experience. 😑
@santiagocorrea5679
Күн бұрын
Richard, why do banks or other financial institutions agree to loans for LBOs? It seems like an incredibly risky side to take on a transaction where the owner's incentives don't align with the survival of the business.
@samsonsoturian6013
Күн бұрын
It doesn't matter. If there's collateral and the price is right, they will lend. Your credit card won't stop you from borrowing to buy stupid stuff
@_Ekaros
12 сағат бұрын
It is all fine as long as they can find buyer for that loan. Remember the whole sub-prime mortgage, sometime the banks or loan initiators don't keep the loans around, but instead sell them forward. Quality does not matter if it only takes a few months to flip whole thing.
@jordank249
13 сағат бұрын
Better discussion on PE than virtually all of financial KZitem. (Which is essentially "Blackrock controls everything! WAKE UP SHEEPLE!(TM) remember to buy my book."
@Acceber92s
13 сағат бұрын
A little out of date but the movie barbarians at the gate is a great telling of how private equity has worked
@RandomVenezuelan
Күн бұрын
>SEC >Protecting smaller investors Yeah, I'm not sure if those currently check out
@samsonsoturian6013
Күн бұрын
Shut up. Get drafted
@JaredAuch
Күн бұрын
Every time someone explanes private equity to me my response is "Oh so crime." sounds a lot like crime. They just call them fees instead of protection money.
@samsonsoturian6013
Күн бұрын
Liar
@qjsharing2408
Күн бұрын
Why would you lend to a leveraged buyout, if the company itself is likely to fail
@samsonsoturian6013
Күн бұрын
If there's collateral and the price is right.......
@luisfilipe2023
13 сағат бұрын
PE discussions remind me of the famous “capitalism is about profit and loss when you bail out the losers there’s no end to the cost”. When people can take all the reward and outsource all of the risk that’s a recipe for disaster
@Slide61
13 сағат бұрын
It isn't just the service sector. Much of our industrial base were victims to PE with the jobs and companies offshored to increase margins. Nothing will change until we are on our knees
@vicentecabrera9245
10 сағат бұрын
Private equity is awesome. Great returns overtime. That is the highest returns in client portfolios, so we allocate as much as we can to PE.
@aenorist2431
Күн бұрын
Because they are leeches that add no value (beside the arguable value of "showing how flawed the system really is").
@samsonsoturian6013
Күн бұрын
It's called a ponzi scheme
@DataRae-AIEngineer
19 сағат бұрын
Fantastic video! Probably the best video you've ever made. Thanks!
@Simon-ir6mq
Күн бұрын
If leveraged buyouts lead to bankruptcy so often then why do banks give that money to PE funds? Seems like a bad deal for them.,
@WiCapitalco
Күн бұрын
Private equity buys the assets by bankrupting the company using debt traps. I was recently at one of the Black Stone executives' homes in RI... his summer cottage is a 26m dollar compound
@zachweyrauch2988
Күн бұрын
Their money is so big it changes what i need to do with my money. My effort is considered the same as things accomplished with that money but no effort.
@xlTaylx1
Күн бұрын
Awesome a video about private equity that doesn't require watching 70+ connect the dots videos.
@lastspring
Күн бұрын
They wouldn't let the general public invest in PE if they didn't need liquidity. Let that sink in.🤔
@matthewstagg9786
Күн бұрын
Gary would say this is the inevitable consequence of growing wealth inequality.
@ROMANTIKILLER2
21 сағат бұрын
Basically, the answer to the question whether privaty equity firms are actually evil is a resounding yes. Taking loans to buy companies and then saddle the resulting debt on such companies is a practice that should be illegal in a world with better politicians across the board, and the fact that the PE model is structured to make profit even if the bought companies not only do not turn profits but go bankrupt says enough about its sustainability. The fact that such vampire business model is allowed to exist in key industries and service infrastructures such as healthcare only makes matters even worse.
@bodaciouschad
21 сағат бұрын
Ultimately, no entity ought to be allowed to own a signifigant portion of the overall market large enough to enable moving the market on their own.
@CommittingSudoku
Күн бұрын
I've never been this early to a video before but it's crazy how many bot comments there are, fearmongering despite obviously not watching the video.
@Yura135
Күн бұрын
not everyone hates private equity, just the people who don't have millions invested with private equity firms. the 1% loves the fact that they have economic power over everyone else and private equity is a big part of that.
@zz3410
Күн бұрын
They commodify public goods like education, health care, vet hospitals, just some things that should not be at the greed of shareholders.
@jphillq
Күн бұрын
Making it difficult to compare your results to industry standard results, even to your own clients, sounds like a classic scam.
@michaelreavey4527
14 сағат бұрын
I would love to see a study of the management teams installed by PE firms after a takeover. I think it would be very telling to see the profile of age, experience, schools, birthplace, personal connections, etc.
@geneh460
Күн бұрын
They are simply paying attention.
@adampagano5361
12 сағат бұрын
I don't think it is PE itself, it is the art of Vulture Capitalism that they have mastered that makes people so angry. The lack of legal accountability just makes it feel that much worse. The USA has historically treated its business and wealthy class with kids gloves, and I don't see it changing any time soon.
@FullLengthInterstates
Күн бұрын
as long as private equity is able to out bid everyone else, they will continue to do what they please to their companies.
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