>I'll bet 1 share...

I won't be your counterparty on that bet, you've already won:

https://www.forbes.com/sites/saradorn/2025/09/15/trump-wants...

One of the reasons cited? All the work it takes. Which is just an insane response. If your business is so poorly run and organized that reconciling things each quarter represents a disproportionate amount of effort, something is very wrong. It means you definitely don't know what's going on, because by definition you can't know, not outside those 4 times a year. In which case there's a reasonable chance the requirement to do so is the only thing that's kept it from going off the rails.

>If it's not publicly traded, it's super secure from any public accountability.

Under the existing legal and regulatory model, yes.

But what abusing that model long-term will eventually result in government-level change that effectively bans the existence of such exploits, wide-spread vigilantism, and/or some sort of collapse.

I'd even go so far as to say that shareholding in PUBLICLY TRADED companies is one of the primary engines of enshittification. Shareholders want to extract rents from the ecosystem, full stop. And if the CEO isn't sociopathic enough about it, they’ll replace them with one who is. Everyone who buys shares at price X wants to sell at >X, forever. That incentive structure alone guarantees a race to the bottom.

How to fix it: let shareholders be gradually bought out—much as slaveholders in Europe were—by (gasp) utility tokenholders. Think Shares in Disney Corp vs Disney Dollars. You transition from extractive shareholders to people who actually use and depend on the ecosystem. That eliminates the parasitic shareholder class that drives most of late-stage capitalist enshittification, rent extraction, and negative externalities.

For clarity, here are just some of those externalities that flow directly from quarterly-earnings-driven incentives:

  destruction of ecosystems
  deforestation and rainforest loss
  collapse of fisheries and ocean systems
  factory farming / industrialized animal suffering
  desertification of farmland
  strip mining and toxic waste dumping
  privatization and depletion of freshwater
  carbon emissions and climate destabilization
  environmental injustice and poisoning of local communities
  lobbying to block regulation and accountability
  social media addiction design for engagement metrics
  monopolization and killing off smaller competitors
  offshoring, wage stagnation, and worker precarity
  financialization of everything (housing, healthcare, education)
  political capture to preserve the whole machine

The entire model of late-stage shareholding is flawed. Corporations exist because governments grant them charters. Government sets the rules for how shares work—and can change those rules. Buying shares is not like buying bonds. Shares are residual claims with far higher risk. So we can absolutely add another risk: that shareholders may be gradually bought out and the institution wound down, the same way the FDR administration forced private gold holders into a buyout under the Gold Reserve Act.

That was far more authoritarian, because gold is a physical asset you own in self-custody. Shares, on the other hand, only exist because a third-party company continues to operate in ways that profit you. That dependency already implies higher risk. Therefore, we can add the additional risk of a structured, government-mandated transition away from extractive shareholder capitalism—just like Europe did when ending slavery. And let's be honest: late-stage financialized shareholding has been a blight on the planet.

And none of this is historically radical. Before the modern era, the idea that shareholders should dominate everything simply didn’t exist.

Pre-1960s:For much of the 20th century, a broader "stakeholder theory" was the norm. Management balanced employees, customers, suppliers, and communities—not just shareholders.

1960s:The turn began with Milton Friedman’s argument that a company’s only responsibility is maximizing shareholder profits (1970 NYT Magazine). 1980s:Shareholder primacy took over.

  Hostile takeovers forced boards into short-termism.
  Executive compensation was tied tightly to stock price.
  Financialization embedded all of this into corporate DNA.

If that ideology got us enshittification, ecological collapse, and a sociopathic corporate culture, then yes, we can fix it the same way other harmful institutions were fixed: buy the incumbents out and transition to a saner governance model.

The big difference is the extent to which PE will go to juice the quarters earnings. Public companies cannot and will not just fire all staff, fleece customers to the point they won’t return and take on debt that they have no intention of paying back. PE will do all of the above and more if it means they get their money. Which means, you as a customer get screwed over more when PE is involved.

To me PE is just secondary effect of incentivizing private pension schemes over pay-as-you-go schemes in the last half century to me.

A huge wealth transfer in disguise providing capital to financial actors (not at last PE) that are usually not aligned with goals of regular employess: affordable housing and healtcare and reasonably safe jobs.

As Germany is on it's way to dismantle it's core of it's pay-as-you-go mandatory state pension insurance and shift towards private, and privat-by-proxy schemes via company pension plans. Europe might be also going that way some time in the near future, but without the comparably healthy demographics of the US.

https://en.wikipedia.org/wiki/Revenue_Act_of_1978

Funny that all those charts eventually go back to Carter allowing for 401k not, Reagan, though that reuse only happened later.

My bigger hunch here is supplying the capital markets with that much additional money was a mistake, that ultimately lead to the current guilded age and accelarated existing trends of in the productivity–pay gap, social stratification and wealth inequality, if not solely being responsible for it.

It seems outright impossible for most to compete with a economic reality where the accrued value of like a third of your and everyone else's paycheck is actively working against your net quality of living, when you're not in the top 1 to 10% where the capital gains are a still a net positive over the increased cost of housing and wage stagflation etc.

I think generally it is a complaint against the soullessness of corporatism versus ownership that actually cares about delivering a good product and treating their customers and employees right.

Greed is very high right now. And you can see that in the behavior of all types of companies. Historically when greed is high like this you eventually end up with a Lehman Bros or Enron situation that causes a painful market place correction.

Private equity is far worse. It means 100% ownership by a group of sociopaths who are executing on a plan to extract as much cash as possible quickly with no other goals at all.

At least public companies have some diversity in ownership and agenda.

Galaxy brain: both are bad, although at least a public company is, ostensibly, trying to make a good or provide a service (lol).

The question anyone reading this analysis should ask is: if private equity is so benign, where do the returns come from?

The unlock, which these papers don't understand, is the extractive nature of P/E that is hidden.

A few clues: 1. A .5%-1% increase in prices is meaningful (Overall industry prices rise after buyouts, but again the price increase is on average very modest.) Retails margins routinely are measured in fractions of percentage points (bps). As an example, even if overall hospital prices stayed similar, P/E firms have been caught jacking up prices on people who need it most. Research on "Surprise Billing" in emergency rooms spiked immediately after PE firms took over staffing groups. Are you surprised?

2. Equity multiples are "effectively" a form of stealing from retail / pension plans: this is where the real 'theft' happens (if you want to call it that). If you reraterevenue from 6x (private) to 15-20x, someone is now paying 2-3x more per dollar to have that company in society. The key is the P/E OWNERS reap that value, so even if there are no job cuts, the wealth being created aggregates 'money supply' to the owners. This has downstream impacts on inflation.

3. Independent of aggregate effects - local effects are quite devastating. This is not P/E's fault, but closing down plants can kill towns for good. The question here is ownership - a family feels some tie to the community to attempt to help their friends and neighbors. P/E absolutely destroys this tie - the subtle but measurable effects compound.

Finally, even if you like P/E as a VEHICLE (which - I would argue it hasn't been a 'good' ones since like the late 90s), you can't ignore the fact that it's returns have largely been eaten by fees.

You're right to say that P/E is just playing the market. That doesn't mean that its impact on society has been good - the entire reason we're in the current political and economic situation we are today are by following the 'laws of the market' which have hollowed out the middle class and created a pretty large affordability crisis despite the world having achieved record levels of wealth.

The transfer from 'doers' to 'owners' has been a net negative for American society, and one of the primary reasons we don't 'build' things anymore - it's just not capitally "efficient"

Are you referring to Private Equity (as in MBOs/LBOs) or Venture Capital? None of what you're stating is rooted in reality or data. Source: https://www.bain.com/globalassets/noindex/2025/bain-report_g...

> - The overwhelming majority of PEs lose money.

What? No. Read the report:

"Buyout funds continue to outperform public markets in all regions across time horizons longer than five years"

> - Annualized return of PE in UK has been 2.1%, this doesn't even match parking money in short-term bonds.

Once again, read the report.

> The only ones that have profited out of PE, beyond the managers working there, are those that invested in the PE itself, meaning buying shares of the fund itself.

I sold my business to PE and I profited nicely. So I'm not sure what you're concluding here...

Take the parent's post with a grain of salt.

I mean, their counter-parties know all of this, but the fact that PE assets don't need to be marked to market on a regular basis can be good for a lot of these investors, as it introduces a delay in the spiral that can otherwise occur with public assets.

Like, if AI collapses, everyone's gonna sell Treasuries to cover losses as they are super liquid (mostly), but the PE assets can pretend that they're still worth whatever, thus reducing margin calls.

PE is generally bad, but their LP's are not entirely stupid and the ability to mark to imagination is worth a bunch of money sometimes.

As far as I’ve seen that’s as far from the truth as it can be. They in fact consolidate terrible businesses, undercut the good ones and drive them out of the market until only they are left, after which point, they get even worse.

If only it actually played out that way[0][1][2][3]

Whatever legal and theoretical role they play in the economy does not match the actual, real role they are playing: PE firms are by and large, economic vampires. They have a well documented history of sucking the life out of a sector at the expense of workers and consumers alike

[0]: https://www.wired.com/story/megan-greenwell-bad-company-priv...

[1]: https://www.theguardian.com/business/2024/oct/10/slash-and-b...

[2]: https://www.theatlantic.com/ideas/archive/2023/10/private-eq...

[3]: https://doctorow.medium.com/the-long-bloody-lineage-of-priva...

That's not true at all! Funds often look for mature companies with predictable cash flow. They can make returns while also squeezing margins under the illusion of expertise and economies of scale and seek to the next fund for a multiple. They're an alternative to the massive headache of going public and getting a liquidity event, not typically the model for your weak and dysfunctional company.

this would be somewhat arguable as okay except for their introduction into categories like daycare, emergency rooms, drug and alcohol rehab, care homes for the geriatric and disabled, etc. things that probably shouldn’t be profit oriented to begin with yet are and are being snatched up by private equity, worsening outcomes in basically all of them

Tell that to former JoAnn Fabrics customers.

They pick on the weak companies but the basic model is to pick over the corpse and leave someone else holding the bag. Make it look good on the surface, leverage it to the hilt, extract cash and let it die.

I think the avian analogy you are looking for are vultures picking at the remains of road kill.

How do I travel to the alternate universe where private equity apparently makes things better instead of worse?

Dell has been a publicly traded company again since 2018.

If all of those things never invested a cent in private equity funds that buy up existing companies to turn the screws on their customers and put the money into new business creation instead, they wouldn't be making any less money and the whole world would be better off, including the investors themselves in their role as customers and employees.

That's a good point. Private Equity is a fairly broad umbrella term that encompasses a variety of investment strategies and business models.

The type of Private Equity that most here are referring to is the type that buys up existing businesses, squeezes as much money as possible out of them, and throws their desecrated corpses in the gutter. These "investors" are a blight on society, this activity should be criminalized, they should be in prison.

But there are a lot of well-meaning investors who do great things for society that also get stuck with the same label.

The fact that the strategic wedge with which a successful, relatively socially-positive business manages to sustain itself isn't universally accessible doesn't negate its value.

The Venn diagram between people who shop at dollar stores and people who shop at Costco isn't empty.

> the ability to both afford next week’s food this week

At minimum that's everyone on a normal paycheck, paid every two weeks. There are situations where someone couldn't get together a few days' pay at once, but that's a tiny fraction of situations.

And the means to store most food is a two foot square of space in a room somewhere. And then most of the rest fits in the empty fridge space you already have.

And there are deals there that can be useful for your wallet right away. This isn't something where you have to put up a ton of money for months before you benefit.

The biggest issue is probably that costco isn't easy to get to.

For me it's very simple: What I save on glasses pays for my membership. I don't go all that often but it's still worthwhile.

This is true, but a valuable - and damning - observation that this variation in business model, that seems to be both decent and profitable, is so rare

... and a car to haul all that stuff, and time to drive to the nearest Costco.

It really is a luxury that a ton of people can't afford.

not sure your comment is any less insufferable.

I see you're not terribly familiar with Costco. Membership fees account for the vast majority of net operating income for Costco and they keep markups on items at no more than 14% over cost (15% for Kirkland brand).

So yes, Costco does make most of its profit by ensuring customers are happy and continue to renew their memberships every year.

Counter example: they sell their dollar hotdog and pop right at the front!

The problem is that they drive out local grocery stores that were actually pretty good, have terrible safety records, and food sanitation.

Last Week Tonight did an episode on them: https://www.youtube.com/watch?v=p4QGOHahiVM

Being in a shopping rich area, I have some luxury of choosing what I get where. DG is a good option for a small list of items, about ½% of my shopping.

But it'd be awful if my best shopping option was 15mi away.

The concept of "small convenience store near me" isn't the problem. The problem is that these stores are actively engaging in outright fraud. People who shop there are absolutely getting fleeced regardless of how much gas they burn getting to the store that's regularly ripping them off.

Having a small nearby connivance store and not getting scammed is an option. If the ability to get beer and hot dogs buns without having to drive to a larger more distant store is really worth the higher prices customers are getting fraudulently charged at the register, then these stores can just stop lying to customers and post the accurate prices.

If the laws were meaningfully enforced this is exactly what would happen. These stores would either comply with the law and stop committing fraud or they would be shut down, their CEOs would be sent to prison, and competitors willing to follow the law would step in to fill the need the market has for a small shop that sells beer and buns to rake in that profit for themselves.

Costco purposefully targets the upper middle class to nearly the point of exclusion of everyone else. By charging membership fees, product selection, and the bulk pricing.

They could care less about the bottom 50% of the market.

Costco's revenue comes from their membership fees and their ability to strongarm suppliers to give them favorable terms (eg. Costco is one of the largest alcohol importers in the US and tends to strongarm LVMH).

I love Costco (I practically grew up at Costco as a kid), but their ICP is not the kind of person who shops at Dollar General or is on SNAP - it's very much targeted at the 50th percentile income bracket and above [0].

And this is why PE has taken over the dollar market segment - because it's a trash business that no one else wants to service over the long term. PE is basically the last resort if a business cannot raise capital from traditional avenues, and leadership and investors want to exit. For y'all graybeards think of "Sam Vimes Boots theory".

Mine Safety Disclosures did a great overview on Costco's operating model a couple years ago [1].

[0] - https://www.businessinsider.com/how-costco-sams-club-shopper...

[1] - https://minesafetydisclosures.com/blog/2018/6/18/costco

>we’re here to provide affordable and convenient access [...]

You'd have to be incredibly naive to interpret that as "poverty relief".

That's how every super market or grocery store in the entire world would describe their business.

> search engine: 22 relevant results in 0.85s.

Being able to understand what those results mean is the important part.

You’d have to explain why you believe that. Just because someone in poverty can afford to purchase items in the store, doesn’t mean it’s good value, i.e. it’s not necessarily providing relief from poverty. In fact, it’s the opposite. See e.g. “How the dollar-store industry overcharges cash-strapped customers while promising low prices”:

https://www.theguardian.com/us-news/2025/dec/03/customers-pa...