Warren on Private Equity

[KT2000]

This short is a good one to share with others. These vultures are destroying communities. Our local hospital is looking to partner with and many private equity firms expressed interest. No way!

https://www.youtube.com/shorts/9qgkDEGXMlw?feature=share

[MichMan]

1. Why would profitable successful businesses sell to private equity in the first place?

[KT2000]

2. Money

The Financial officers are contacted by PEs to sell. They offer the moon - huge bonus to the finance officer who becomes the salesperson to the CEO and board. A huge cash buy becomes enticing and they run with the money, leaving the company to sink. This is one way people become billionaires.

[MichMan]

3. I believe the three mentioned in Warren's video were all public before being sold to PE

Don't the shareholders need to approve any sale?

[KT2000]

4. good question

if so, there must be a good offer to the shareholders.

[KT2000]

5. good question

if so, there must be a good offer to the shareholders.

Googling around, it looks like most acquisitions by PE firms are done through leveraged buyouts. Major shareholders are the ones who decide and the minority owners are given either cash or stocks or both.