Just another tool in the super rich arsenal to get super richer, or a legitimate benefit to society?

12/2/2006 11:32:14 AM

I'd say "Market response to unfortunate side effects of Sarbanes-Oxley"

12/2/2006 11:37:41 AM

What about the thought that the PE firm can trim "fat" and reoffer the company for big time profits, and you know the banks doing the offering are going to love this because they get a slice. Just seems like another fun way for the rich to manipulate the stock market to their desires in order to get richer.

12/2/2006 11:59:46 AM

I'm going to need you to give me an example, because I'm having trouble following you.

I mean, if they're trimming "fat" and you mean cutting costs and being efficient, then its not manipulation, but using capital to improve a business and getting a potential profit for it.

12/2/2006 12:13:58 PM

I don't have any concrete examples. It's just a general distrust about all things the super rich are doing, especially when it gets to be "trendy".

A quick googling
http://usmarket.seekingalpha.com/article/21066
the only thing important is

Quote :

"The question is not if we will see some of these very same companies re-list on the various stock markets, the only question is when."

At which point those private equity holders are no doubt getting a good return on investment whether they trimmed fat or not.

12/2/2006 12:47:32 PM

I'm not so sure you're right that they'll make a handsome profit. I mean, they may end up like Vonage.

But, I don't really see any problem with it. How exactly do you think they go about making the money that is in some underhanded way?

I mean, if they aren't making the company more efficient, they're simply waiting for better market conditions. What's underhanded about that?

12/2/2006 12:53:43 PM

Quote :

"It's just a general distrust about all things the super rich are doing"

12/2/2006 12:58:48 PM

Ok, but I would like you to tell me a hypothetical way where they can make money doing this underhandedly.

12/2/2006 1:00:17 PM

Same way Enron folks got rich, by manipulating numbers whenever and wherever possible. Especially easy to do when you don't have to be all revealing your numbers in SEC filings and shit.

12/2/2006 1:24:50 PM

But you do have to put your audited numbers out to re-list the company.

And Enron was a public corporation, so I'd guess you should be worried about those too.

12/2/2006 2:25:22 PM

Not with the help of S-O!

12/2/2006 4:39:32 PM

there exists potential for turnaround experts to come in an turn an otherwise miserable business into a value creating enterprise, but most buyout activity these days seems like a raiders coming in and siphening wealth out of productive businesses.

in the case of leveraged buyouts, the PE firm and cooperating management puts the operating company at risk of significant financial distress, while giving themselves fat dividends. to me it seems driven by how 'for sale' management is, and the relationship of general partners and limited partners in a give private equity outfit (time consuming explanation). sometimes there is win-win and both the bought company and the PE firm end up beter off. however most of the time its just the raiders moving risk around to create wealth for themselves.

i don't think sarbox has as much of an impact on this kind of activity. with PE buyouts followed by an IPO, it seems the PE firms are forcing the exit despite the impacts on sarbox on public equities.

12/3/2006 12:26:32 AM

fyi

http://www.privateequityweek.com/pew/topnews.html



(check out the jobs section too)

12/3/2006 12:47:33 AM