So, Romney's Bain Capital is worse at picking winners and losers than the U.S government?

[Ail]

Kasz216 said:

Ail said:

Kasz216 said:

Ail said:

Kasz216 said:

richardhutnik said:

SamuelRSmith said:

Ail said:

SamuelRSmith said:
Sorry, but isn't the point of Bain Capital to be a venture capitalist? That is, extremely high risk.

Bain is in private equity, not venture capital. It is very different...

Actually, I'm pretty sure Bain does dabble in venture. I remember during the GOP primaries, Gingrich and the ilk dubbed it "vulture capitalist".

Because, you know, the GOP are the party who hates capi- wait, what?

Private equity is vulture capitalism.  At least parts of it is.  It isn't there to fix anything, but come into sick companies and reorder it to try to make money for people involved, particularly the firm setting up the deal.  There is also raising capital for a startup to, and get things going.  In all it, you structure it so no matter what happens, you make money.  This could be gutting everything and selling it for parts.  In this, nothing is on trying to succeed, and grow the economy, just maximize profits.

Connected a bit with this is a recent conversation I had with a former business partner, who is currently in trying to get people money.  He is lamenting what he is doing now, and wondering if he is actually helping.  He now laments getting some guy money for a business, getting investors, and then finding out that the business isn't likely to make it.  He says he made a mess out of more than one person's lives.  He is now thinking of getting an R.V, leaving where he is, and going to mine for gold.  Even in this case here, his attempt to get a busines going is causing more harm than if he didn't do anything.  And he has lawsuits and creditors breathing down his neck.  He feels entrapped in his situation.

Count all this as a reevaluations of what hung around what was remotely considered a social contract.  People are wondering what this "American dream" is that people thought they understood and it looks very risky now.  No more it seems like you can trust by play by certain rules, don't cause trouble, and get a middle class lifestyle.  The GOP primaries went into this also, with Mitt as the focus.

I would agree that it's vulture capitalism...

in that just like vultures it's something that gets bashed by people despite it being overwhelmingly a good thing who's existence helps the general ecosystems it inhabits despite the fact that both are just worried about their own health and survivial.

It might do some good but I'm sorry, the whole idea of getting a company to take out loans to pay dividends to the private equity that took it over just is plain stupid and should not exist.

There isn't any situation where it is good for the company. And you will never see a public company do it.

The only reason private equity gets away with it is that they know they won't be in charge of the company by the time the loans have to be repaid...

This is too the major reason why companies do go under after being take over and let go by private equity..

Except you know... all the companies that have done it that were going to go out of buisness... and now are still in buisness.

Also... it has happened with public companies.

I believe Safeway was one of them.

Not every company taken over by private equity is necessary a company that was going out of business....

Private equity take over companies when the stock price is attractive and not every company with a low stock price is necessary heading for bankrupcy...

The ones that get purchased with LBO's tend to be.

Burger King, Toys R US, Michael's stores, Dunkin Donuts were all purchased by Bain, none of those were in bad shape or heading for bankrupcy when it happened. Granted they were not the best performing in their sector, but they were not bleeding money either... Burger King and Michael's stores were LBO, not sure about the 2 others...