| ▲ | lumost 10 hours ago |
| Are these hostile takeovers? buying a competitor out through a PE deal could be cheap relative to competing with them. |
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| ▲ | WJW 10 hours ago | parent [-] |
| No, they just come in and offer a lot of money to the current owners. Bending spoons are ruthless businesspeople but AFAIK they do offer a reasonable price for the businesses they acquire. (I used to work for WeTransfer and some time after I left it got acquired at about the price it was once considering IPO-ing at. This was apparently such a good offer that it took very little deliberation to agree to the deal.) |
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| ▲ | lumost 9 hours ago | parent [-] | | but where does the money come from? it seems like a good way to avoid regulatory scrutiny if your acquisition goal is to simply exit a competitor from the market. | | |
| ▲ | rcxdude 5 hours ago | parent | next [-] | | The money comes from investors. Private Equity basically works by taking money from investors to buy companies and turn a profit with them, paying back the investors when they do so (it's a very illiquid and risky investment, so the advertised returns tend to be higher, but it does seem like a lot of firms are struggling to actually make it work). | | |
| ▲ | lumost an hour ago | parent [-] | | Aye - it’s a simple business model, which seemed to work well in an era of low interest rates. However some of these tech buyouts seem quite myopic, making it almost appear like the goal was to shutdown the company. |
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| ▲ | hedgehog 7 hours ago | parent | prev [-] | | Basically a loan. |
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