Quotes from the article:
> In 2019, his company merged with Illinois-based Corelle Brands, the owner of Pyrex, CorningWare, SnapWare and Corelle.
> In 2021, at the height of its popularity, the company borrowed $450 million US worth of bonds, due in 2028, to expand its business.
Is Corelle the PE firm? Is "expand its business" the standard figleaf PE firms use when looting a business?
But it's constant and blatant and somehow seems to still be legal.
The PE firm here is Cornell Capital.
PE itself is a bloated industry because we have too much money being extracted out of the real economy going into the pockets of the already wealthy who don't know what to do with it, so they hand it to a money manager (i.e., PE) to make more money for them, not knowing what to do with those potential future earnings either. this is the kind of economic inefficiency that concentrations of capital brings, in direct refutation of the common economic argument that the wealthy are better at investing money (i.e., more capital efficient, which in turn supposedly adds more real productivity to the economy).
small, local amounts of wealth are more capital efficient, but large, distant amounts are not.
Private Equity, as a distinct industry, is fully engaged in looting of the type contemplated by the principal-agent problem:
the principal-agent problem emerges in any business where professional managers are employed (which usually happens when a business gets too big for its britches), so it's not PE-specific.
If you look up the names of some of the PE companies they're quite on the nose: https://macellumcapitalmanagement.com/ Macellum literally means "meat market": https://m.dict.cc/latin-english/macellum.html 'Take an animal (company); chop it into parts and sell those off'
Wikipedia page for Macellum: https://en.wikipedia.org/wiki/Macellum
> Macellum’s campaign resulted in the addition of 4 of 13 directors. Also, as a byproduct of the pressure applied during the campaign, the company sold non-core assets equal to approximately 75% of the market capitalization. Macellum’s price objective were met and we exited the position at the beginning of 2021. Subsequently, a fractured board and new CEO were unable to oversee and execute the turnaround plan Macellum outlined during our campaign and results deteriorated.
"Yes, as through this world I've wandered I've seen lots of funny men; Some will rob you with a six-gun, And some with a fountain pen.
And as through your life you travel, Yes, as through your life you roam, You won't never see an outlaw Drive a family from their home."
This is an utterly textbook private equity play, the kind of thing that has been wrecking American business and jobs.
There's nothing subtle about this at all, it's looting with a pen.
They acquire the business, load it down with massive amounts of debt, do reckless short term things to boost growth (aka "eating the seed corn") and then take the money and keep it leaving someone else holding the bag.
It has nothing at all to do with how much people do or don't like cookware.
It's a bust out, a racket, just an inch away from organized crime. It happens daily in this country.