Whereupon We Pontificate About Poor Media Outlet Choices

goofy · May 22, 2024, 7:31am

Here’s one example: https://archive.ph/pQVLF#selection-5569.0-5569.9

It doesn’t really get at the how (like, how does a PE firm buy a company via debt it puts on the company, which is a weird trick they do and I forget why on earth that works) but it gets at some of the why:

One way to think about it is that a private equity firm is a conglomerate plus financial engineering. Traditionally, a conglomerate is a big company that owns lots of more-or-less unrelated businesses. Some of them will do well and others will do poorly, but the ones that are doing well can help support the ones that are doing poorly, and hopefully most will do well and the overall company will make money. Meanwhile the overall company is big and fairly stable (its bets are diversified), so it can borrow money cheaply, and it has talented managers who can make all of the component businesses work better.

A private equity fund also buys lots of more-or-less unrelated businesses, some of which will do well and others poorly. The overall fund has talented managers who can supervise and optimize all of the businesses. But instead of borrowing money at the overall fund level, the fund keeps each of its unrelated businesses separate as a legal and financial matter: Each business has its own balance sheet and borrows its own money. And the businesses borrow a lot of money: Private equity companies tend to run at higher leverage than traditional public conglomerates.

The result of this is that the PE fund is a series of somewhat independent bets on different businesses, and each bet has high variance: There is some chance that the bet will go to zero (the company is very levered, it fails, and the PE fund loses its entire investment), and some chance that the bet will return 1,000% (the company is very levered, it succeeds, and the PE fund gets back 10x its equity investment). Whereas in a traditional conglomerate the bets have less variance and are more likely to cancel each other out: Losses at one business are a drag on the other businesses in a way that isn’t exactly true for a PE fund full of independent bankruptcy-remote companies. “A basket of options is worth more than an option on a basket,” I sometimes say; a PE fund is more like a basket of options, while a conglomerate where all the businesses support one another is more like an option on a basket.
…
Limited liability at the company level is an essential part of the private equity model: You borrow a lot at every company, and the ones that don’t work out you cut loose; their creditors take losses so you can protect the rest of your portfolio.

This seems like something @ParlaySlow might know more about.

boredsocial · May 22, 2024, 12:02pm

Private equity doesn’t always buy unrelated companies, in fact there’s nothing they love more than buying a company and forcing it to do business with their other portfolio companies on unfavorable terms. They also love buying up the majority of a type of business (they love medical practices, dentists, and vets for example) in an area, creating a bottleneck, and jacking up prices.

Honestly the problem I have with PE is that I very rarely run into any project of theirs that actually adds any real world value in 2024. It’s mostly just stuff that is less than a single degree of separation legally from what outright white collar criminals do and zero degrees of separation morally/ethically from what white collar criminals do.

Their most common strategy is basically a legal bust out ffs.

goofy · May 25, 2024, 7:32pm

pvn · May 25, 2024, 9:59pm

hahahaha holy shit these reporters must be the dumbest motherfuckers on earth if they bought that jesus christ

grue · May 25, 2024, 10:13pm

Ah yes ginnie thomas is just a doting homemaker as we all know.

goofy · May 27, 2024, 10:55pm

Deranged and detached from reality. The opening paragraph:

360 followers!!! The rest of the piece cites zero examples of anyone facing exclusion or negative consequences for supporting Israel, it’s all vibes like “people are being very mean to Israel, but Israel Has A Right To Defend Itself” and “lots of people are protesting PEN America, and I don’t like that one bit”. As this guy whines about “free expression” for supporters of Israel, meanwhile, in the real world:

McTrollson · May 28, 2024, 6:47pm

It’s pretty clear these people are being boycotted for their expressed views on the Israel/Arab conflict and not because they’re Jewish.

goofy · May 28, 2024, 7:42pm

It’s not even clear they’re being boycott at all. Someone in Twitter with 360 followers would like to make them part of BDS and that’s enough for the NYT to publish a moral panic piece.

Danspartan · May 28, 2024, 9:53pm

What in the name of Soul Man is this?

https://x.com/forstersam/status/1795492082636795958?s=46

Danspartan · May 29, 2024, 3:05am

https://x.com/michaelharriot/status/1795646218342924583?s=46

MrWookie · May 29, 2024, 5:00pm

He’s not even original:

goofy · May 31, 2024, 12:37am

goofy · June 3, 2024, 5:48pm

(the pandemic probably did not start in a lab)

Danspartan · June 3, 2024, 6:08pm

Jfc

Surf · June 3, 2024, 6:29pm

I gave up on trying to keep track of all the Covid personalities years ago and seems like she currently employed by what I assume is a quite prestigious institution that knew about her Covid stuff for years. Makes me wonder what the deal is, she must not be some complete whacko

goofy · June 3, 2024, 6:42pm

McTrollson · June 5, 2024, 3:11am

kerowo · June 5, 2024, 1:48pm

There are people out there doing shitty photo collages for pennies to put in the Getty image library? It is really too easy for us to get food as a society…

McTrollson · June 5, 2024, 1:57pm

We’re lucky the NYT isn’t using AI art.

Danspartan · June 5, 2024, 6:26pm

Have not read by blue twitter assures me that sources are 100% republican and that Kevin McCarthy came out of some of things meetings strongly praising Bidens intellect.

So IDK

We do have bond villains running a lot of our media.