|
|
|
|
|
|
by nradov
1484 days ago
|
|
|
That is exactly the business model for some private equity firms (corporate raiders). They identify undervalued companies with strong revenue and significant assets where incompetent management is wasting resources and buy the company. Then they stop investing in growth, cut expenses to the bone, borrow against the assets, issue huge dividends to shareholders, and allow the company to gradually die. There's nothing really wrong with this approach and it probably helps increase overall economic growth through better capital allocation. But it can be a rough ride for employees caught in the process. |
|
|
Or an opportunity. They should see the private equity firms coming in as a signal it's time to jump ship and not liquidate their stocks (actually, renegotiate your ESPP while you look out for the next thing!).