Kontextmaschine

27th January 2021

Post with 12 notes

One thing re: the GameStop stuff, you see moral stuff like “funds just buy going concerns to load them up with debt and profit by crashing them!”

Well this decomposition function is kind of what that part of finance is for; an evolution of the ‘80s Mergers & Acquisitions wave that bought up companies and cracked them open for the gooey stored potential value of a whole postwar era not maximizing for profit, just stable existence – debt is a way to extract value upfront, and the idea is you time it so the financials bottom out when it stops being a useful business concern.

Which benefits stockholders at the expense of other “stakeholders”, the Rust Belt would’ve collapsed into heroin despair even faster if we’d been like this before and it didn’t keep going on a 2-decade overhang

But “a mall-based vidya disc retailer” might be so obviously in decline that enough money jumped on the obvious no-brainer opportunity to break it up for salvage that their position became vulnerable.