happyhoix
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Post by happyhoix on Nov 13, 2013 14:16:09 GMT -5
tethering upper management compensation to the stock price is what's killing employment on all levels. Also encourages reckless decision making on the part of upper management. They will pick potentially risky actions that might generate short term stock price increases over less risky options that won't juice up the short term stock value but will be in the best interest of the company in terms of long term success. So, ironically, running the company into the ground benefits upper management, at least for a while, because their bonus is tied to stock prices, and then when the company tanks they have their golden parachutes.
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happyhoix
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Post by happyhoix on Nov 13, 2013 14:31:52 GMT -5
all good news for an aspiring new toy store owner Yeah, but if you're a loyal Toys R Us employee who's worked there for years, I imagine it would suck to see your once profitable employer crap out. Meanwhile the Bain guys walk away, while the Toys R Us employees hit the unemployment line. I guess that's good news for an aspiring new toy store owner, too - the job market flooded with experienced toy store employees who will work for cheap.
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Sum Dum Gai
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Post by Sum Dum Gai on Nov 13, 2013 14:35:07 GMT -5
All retail employees work for cheap. One with experience at Toys R Us will know my products better, but it's not like Toys R Us was paying their shelf stockers and cashiers big bucks for their vast expertise.
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happyhoix
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Post by happyhoix on Nov 13, 2013 14:37:08 GMT -5
Oh great, education by terror. Always a great way to motivate people.
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Post by Deleted on Nov 13, 2013 14:40:22 GMT -5
lots of degreed people sitting in offices making 50-75k
and most have to worry about their job because that skillset is becoming more and more common
whereas the really good tradesman is worth more and more every year
fewer and fewer people going into the trades.....
high schools not introducing courses like mechanics has something to do with it
but too many parents think the trades arent good enough for their kids
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Post by Deleted on Nov 13, 2013 14:47:32 GMT -5
all good news for an aspiring new toy store owner Yeah, but if you're a loyal Toys R Us employee who's worked there for years, I imagine it would suck to see your once profitable employer crap out. Meanwhile the Bain guys walk away, while the Toys R Us employees hit the unemployment line. I guess that's good news for an aspiring new toy store owner, too - the job market flooded with experienced toy store employees who will work for cheap. imo the leveraged buyout firms for the most part are the worst scum of the earth i know....i love capitalism....but these guys kill companies for money that isnt capitalism.....maybe corporate murder? i have zero issue with the firms that INVEST in startups.....and strike it rich when a firm like Tesla goes public but the ones whose only intent is to drain the company of all liquidity, and increase the debt load to where the paybacks are questionable, are just bad for everyone that is why so many companies changed where they were incorporated.....to more friendly states where hostile takeovers are much harder to get done
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Post by Deleted on Nov 13, 2013 14:53:25 GMT -5
Oh great, education by terror. Always a great way to motivate people. it sure is..... fear is one of the most basic motivators fear of not having a place to sleep fear of not knowing where your next meal is coming from but kids dont fear those things today....why not? and the $ 10,000 question.....is that a good or a bad thing?
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djAdvocate
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Post by djAdvocate on Nov 13, 2013 14:55:59 GMT -5
Yeah, but if you're a loyal Toys R Us employee who's worked there for years, I imagine it would suck to see your once profitable employer crap out. Meanwhile the Bain guys walk away, while the Toys R Us employees hit the unemployment line. I guess that's good news for an aspiring new toy store owner, too - the job market flooded with experienced toy store employees who will work for cheap. imo the leveraged buyout firms for the most part are the worst scum of the earth i know....i love capitalism....but these guys kill companies for money that isnt capitalism.....maybe corporate murder? it's worse. it is cannibalism. they are eating their own.
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Post by Deleted on Nov 13, 2013 16:01:02 GMT -5
Ok, if we want it to stay the way it is then we have to live with the consequences. And those are millions on food stamps, getting government subsidies and trying to survive on lowpaying, no benefit jobs. They used to say you can't have guns and butter in the very old economics classes and now we are also trying to do that and the new model isn't working. Maybe if the government would stop trying to "stimulate" the economy, it could get going again.
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Post by Deleted on Nov 13, 2013 16:08:48 GMT -5
Using ToysRUs as an example, what was Bain's goal to begin with. If you think the goal was to somehow profit by destroying the company, please tell me how that has gone for them. Have they profited? What are the numbers?
Also, if you want to pick on a specific company, please discuss their overall results, not just one or two cherry-picked examples that may not have gone well.
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Sum Dum Gai
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Post by Sum Dum Gai on Nov 13, 2013 18:37:34 GMT -5
Bain's goal was the same one they always have. Acquire a moderately successful privately held company. Hopefully increase the profitability. Take it public a couple years later. Get paid.
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billisonboard
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Post by billisonboard on Nov 13, 2013 19:15:16 GMT -5
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Post by Deleted on Nov 13, 2013 19:52:15 GMT -5
Bain's goal was the same one they always have. Acquire a moderately successful privately held company. Hopefully increase the profitability. Take it public a couple years later. Get paid. So in other words, I was correct when I said that there is no profit or value creation in taking a successful company and dismantling it?
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Sum Dum Gai
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Post by Sum Dum Gai on Nov 14, 2013 2:17:42 GMT -5
Sometimes a company is worth more parted out than it is as a whole, but those companies are usually struggling already. I'm sure Bain and other private equity companies have done dismantle and sell deals, but I'm also sure that's not their preferred acquisition target.
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Post by Deleted on Nov 14, 2013 7:40:41 GMT -5
So that was my point. The claim was that Bain was somehow making a profit while also destryoing value at the same time. As I said, that is essentially impossible. So now since Bain is widely regarded as being "evil", can anyone actually demonstrate that it actually hurts people? Sure, some jobs are lost, but that is life. Jobs come and go all the time. The question is, when the dust settles, are things better or worse in the long run? My guess is better.
Now if you have a beef with people who buy up shares, make demands, drive up the short term stock price, and the sell before it crashes.... Well that's a different story entirely. I think that is called pump and . It seems like some "investors" have figured out how to do it on a large scale. And it only works if the rest of the investors allow it to work.
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happyhoix
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Post by happyhoix on Nov 14, 2013 8:27:25 GMT -5
Using ToysRUs as an example, what was Bain's goal to begin with. If you think the goal was to somehow profit by destroying the company, please tell me how that has gone for them. Have they profited? What are the numbers? Also, if you want to pick on a specific company, please discuss their overall results, not just one or two cherry-picked examples that may not have gone well. In his 2009 book The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, Josh Kosman described Bain Capital as "notorious for its failure to plow profits back into its businesses," being the first large private-equity firm to derive a large fraction of its revenues from corporate dividends and other distributions. The revenue potential of this strategy, which may "starve" a company of capital,[141] was increased by a 1970s court ruling that allowed companies to consider the entire fair-market value of the company, instead of only their "hard assets", in determining how much money was available to pay dividends.[142] In at least some instances, companies acquired by Bain borrowed money in order to increase their dividend payments, ultimately leading to the collapse of what had been financially stable businesses.[55] en.wikipedia.org/wiki/Bain_CapitalTake a company making a profit, suck all the cash out of it, saddle it with debt, then walk away when it collapses. Vampire capitalism.
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workpublic
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Post by workpublic on Nov 14, 2013 9:07:22 GMT -5
Oh great, education by terror. Always a great way to motivate people. it is one of, if not, the greatest motivators of humans. healthy fear(wake up call) isn't terror.
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Post by Deleted on Nov 14, 2013 9:45:03 GMT -5
Using ToysRUs as an example, what was Bain's goal to begin with. If you think the goal was to somehow profit by destroying the company, please tell me how that has gone for them. Have they profited? What are the numbers? Also, if you want to pick on a specific company, please discuss their overall results, not just one or two cherry-picked examples that may not have gone well. In his 2009 book The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, Josh Kosman described Bain Capital as "notorious for its failure to plow profits back into its businesses," being the first large private-equity firm to derive a large fraction of its revenues from corporate dividends and other distributions. The revenue potential of this strategy, which may "starve" a company of capital,[141] was increased by a 1970s court ruling that allowed companies to consider the entire fair-market value of the company, instead of only their "hard assets", in determining how much money was available to pay dividends.[142] In at least some instances, companies acquired by Bain borrowed money in order to increase their dividend payments, ultimately leading to the collapse of what had been financially stable businesses.[55] en.wikipedia.org/wiki/Bain_CapitalTake a company making a profit, suck all the cash out of it, saddle it with debt, then walk away when it collapses. Vampire capitalism. Again, unless you are willing to take a macro look at how Bain has impacted the economy (jobs or other measure), you cannot make such a claim. Running a profitable company out of business never makes sense as a means to maximize return on investment unless they are bleeding one company to invest and grow another. Every criticism here has simply been cherry-picking. I'm not going to engage in such an argument.
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Post by Deleted on Nov 14, 2013 9:51:35 GMT -5
Sidney Poitier's movie "To Sir with Love" dealt with part of what we are discussing
A class of "misfits" in a school that even then was designed to just get the kids out (educated or not)
Teaching respect, manners, and giving the kids hope for the future......
Is that possible today? to teach something other than english or history?
To actually teach the kids how to cope in today's world.....teach them life skills? job skills?
This is the kind of change that i think would make a difference....
Question is.....is it feasible? I can imagine that the teamsters, unions, and such would love to provide guidance on some of the trades
And yes.....i still believe that a LOT of the kids need a SERIOUS wakeup call......
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billisonboard
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Post by billisonboard on Nov 14, 2013 9:56:57 GMT -5
... Running a profitable company out of business never makes sense as a means to maximize return on investment unless they are bleeding one company to invest and grow another. ... A con artist targets one person with wealth and takes what he or she can get and then moves on to the next target. Sure they "invest" in the next con but it is short term so they can get what they want out of the next target before they move on.
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billisonboard
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Post by billisonboard on Nov 14, 2013 10:03:20 GMT -5
Sidney Poitier's movie "To Sir with Love" dealt with part of what we are discussing A class of "misfits" in a school that even then was designed to just get the kids out (educated or not) Teaching respect, manners, and giving the kids hope for the future...... Is that possible today? ... I don't know. But I suspect that Hollywood money is more interested in shot'em up tech movies than "love".
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billisonboard
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Post by billisonboard on Nov 14, 2013 10:06:59 GMT -5
Sidney Poitier's movie "To Sir with Love" dealt with part of what we are discussing A class of "misfits" in a school that even then was designed to just get the kids out (educated or not) Teaching respect, manners, and giving the kids hope for the future...... Is that possible today? to teach something other than english or history? To actually teach the kids how to cope in today's world.....teach them life skills? job skills? This is the kind of change that i think would make a difference.... ... btw, those schools exist and classes are being conducted as I type.
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Post by Deleted on Nov 14, 2013 10:11:02 GMT -5
hadnt heard anything abut them
any idea on success of said schools?
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billisonboard
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Post by billisonboard on Nov 14, 2013 10:12:30 GMT -5
... Question is.....is it feasible? I can imagine that the teamsters, unions, and such would love to provide guidance on some of the trades ... I can imagine they would also since creating a surplus of this type of skilled labor will seriously impact their members ability to work for adequate wages.
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billisonboard
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Post by billisonboard on Nov 14, 2013 10:17:14 GMT -5
hadnt heard anything abut them any idea on success of said schools? What criteria would measure success? I know that my suggestion that I give each of my students in a life skills class an "Incomplete" and have them come back in ten years for an actual grade was not well received by the powers that be. btw, I did get a gift at the end of the year but didn't rip up my letter.
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djAdvocate
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Post by djAdvocate on Nov 14, 2013 12:06:39 GMT -5
In his 2009 book The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, Josh Kosman described Bain Capital as "notorious for its failure to plow profits back into its businesses," being the first large private-equity firm to derive a large fraction of its revenues from corporate dividends and other distributions. The revenue potential of this strategy, which may "starve" a company of capital,[141] was increased by a 1970s court ruling that allowed companies to consider the entire fair-market value of the company, instead of only their "hard assets", in determining how much money was available to pay dividends.[142] In at least some instances, companies acquired by Bain borrowed money in order to increase their dividend payments, ultimately leading to the collapse of what had been financially stable businesses.[55] en.wikipedia.org/wiki/Bain_CapitalTake a company making a profit, suck all the cash out of it, saddle it with debt, then walk away when it collapses. Vampire capitalism. Again, unless you are willing to take a macro look at how Bain has impacted the economy (jobs or other measure), you cannot make such a claim. Running a profitable company out of business never makes sense as a means to maximize return on investment unless they are bleeding one company to invest and grow another. Every criticism here has simply been cherry-picking. I'm not going to engage in such an argument. running a private company out of business makes absolute sense if it has more credit than income potential. borrow $50M, drive it into bankruptcy, and let the banks deal with the ashpile while you walk off with the $50M.
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Post by Deleted on Nov 14, 2013 12:07:18 GMT -5
... Running a profitable company out of business never makes sense as a means to maximize return on investment unless they are bleeding one company to invest and grow another. ... A con artist targets one person with wealth and takes what he or she can get and then moves on to the next target. Sure they "invest" in the next con but it is short term so they can get what they want out of the next target before they move on. That's not what we are talking about....
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Post by Deleted on Nov 14, 2013 13:16:57 GMT -5
Again, unless you are willing to take a macro look at how Bain has impacted the economy (jobs or other measure), you cannot make such a claim. Running a profitable company out of business never makes sense as a means to maximize return on investment unless they are bleeding one company to invest and grow another. Every criticism here has simply been cherry-picking. I'm not going to engage in such an argument. running a private company out of business makes absolute sense if it has more credit than income potential. borrow $50M, drive it into bankruptcy, and let the banks deal with the ashpile while you walk off with the $50M. Fair point. And this is, of course, unethical. At this point I should also point out that most bubbles are caused by "retail investor" types as their greed overpowers their fear of risk-taking. The end result of those bubbles is even worse. So let's not pretend that only the rich are greedy.
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djAdvocate
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Post by djAdvocate on Nov 14, 2013 13:20:10 GMT -5
running a private company out of business makes absolute sense if it has more credit than income potential. borrow $50M, drive it into bankruptcy, and let the banks deal with the ashpile while you walk off with the $50M. Fair point. And this is, of course, unethical. At this point I should also point out that most bubbles are caused by "retail investor" types as their greed overpowers their fear of risk-taking. The end result of those bubbles is even worse. So let's not pretend that only the rich are greedy. i never claimed that only the rich are greedy, so we have no argument there. however, it should be noted that 80% of all equities are owned by the top 10%
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Post by Deleted on Nov 14, 2013 13:34:51 GMT -5
No, but many others make that implication. My only point is that I don't think private equity (on the whole, not case by case) is doing what people think it is doing. It is almost certainly a net positive for the economy, and most people (rich, poor, or otherwise) are not a-holes who want to make money by screwing over everyone else.
And while there are rich a-holes who damage the economy to make a buck, there are regular Joes who do the exact same thing. Or in the case of bubbles, they're not necessarily a-holes, but it still happens.
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