Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.
Yeah, this is the case for most “public to private” company moves, and other types of private equity acquisition deals. They are all just a massive shell game to liquidate a company’s value and transfer it to those private equity companies. Vulture Capitalism
Comical to read this when I just saw a $50 billion dollar sale of EA going private being bought by private equity firms, haha.
My first thought as well. Of companies to lose to further “investor” shittery, I can’t say I’ll lose much sleep over EA if that turns out to be the case.
EA was down the path of being awful, long before that. But yeah…
I was guessing that it was going to be leveraged as a propaganda outlet given the Kushner and Saudi connections, but it does seem more likely that it’ll just be hollowed out and thrown away.
I don’t really know if that’s the same kind of animal though. The Saudi royal family is trying desperately hard to diversify. Into as many different revenue streams as they can. You know to Stave off the coming disaster. So I think maybe they’re actually in it for real with EA, though why you bank on a video game company being a long-term investment I’m not 100% sure. Point is they have so much money now I doubt it’s for a quick profit. They have so many projects right now that are so risky they’re basically burning cash.
Death Spiral Financing is one of those things that should be shouted from the rooftops by anyone who wants to spread anti capitalism. It so cleanly displays the evil inherent to the system.