Wolves, with 100% pure sheepskin seat covers

Something popping up on my radar recently:

The disturbing trend of massive hedge funds and private equity firms using their massive amounts of free cash and buying up struggling large public companies for pennies on the dollar, taking them private, and "refinancing" the debt structure (without any public oversight - because they're now privately owned), and taking GOBS of money out of the business to pay for hefty bonuses and salaries for the managers, or securing more money for other acquisitions, and then summarily managing the business into the toilet.

This has been a trend for more than a year now, and nobody's really talking about it at all yet.

But they will.

Look for me to say more in the future here, with links and examples.

This will be the next "insider-trading" or "stock market" or "whatever" scandal to be outed publicly. It's extremely damaging to the companies, their employees, and to the economy in general, and I'll provide some interesting information on it in the near future.


Reach Upward said...

An unintended side effect of Sarbanes-Oxley. Congress was warned.

That One Guy said...

SOX = two-edged sword...

It's going to reach epic proportions, with exponential growth.

Mikey said...

Dear Mr. TOG:

Strip & flip. They've been at it since the dotcom bust. Niuce work if you can get it, I suppose.