can i ask a question, because y’all are so intelligent on here? i know private equity is bad but by what mechanism? like what does it do? and what do people mean when they say Walgreen’s is gonna be wrapped in plastic?
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it’s a race to the bottom with them. Just like the rest of wall street, they believe every quarter should see increased profits. You can increase profits by increasing sales or efficiency . And sometimes they do that, but when they can’t they cut expenses.
this can lead to layoffs, cuts in benefits, reduction in customer satisfaction etc. There is also monopolistic nature to large PE firms. Blackstone is the largest owner of real estate in the world. Berkshire owns so many companies.
and if a PE firm dangles enough money to shareholders/owners of a business, it’s beneficial for those owners to sell their business to the firm knowing that the consumer will be screwed?
it can be. In all fairness, we are talking about big publicly traded PE firms. There are tons of small firms who own the most unimportant business that don’t do what I just mentioned. They will purchase a regional supplier of pill bottles and own it. Most of the bad PE firms are publicly traded.
I don’t think private equity as a whole is bad (or anymore bad than any other capitalistic business) I think being publicly traded is the issue. Stock investors want increased profits every quarter. Like a company can just match its earning from last quarter and investors will sell their shares.
i see — that’s why you were associating it with wall street previously. this is actually a horrible thing for walgreen’s to have done to its consumers. thank you so much for engaging in this discussion with me it was so helpful!
so they inherit these business for the sole purpose of maximizing profit by any means necessary. thus, many businesses fail as a result of private equity?
Private equity firms acquire healthy businesses, saddle them with unnecessary debt, then claim they need to sell every asset the business has to repay the debt. The only benefit is to the shareholders who profit from the fire sale.
THAT is terrible????? literally terrible. so private equity essentially destroys businesses so the top brass can cash in. and why the hell would a PHARMACY buy into this?
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