It ought not to shock me, because I’ve been alive for nearly 60 years, but it does. It seems extraordinary that it is apparently legal to buy a company with money you do not have…. Actually, I was going to continue that sentence, but let’s stop there. Racking up massive debts just to buy a company at way above its market value seems incredible and irrational to me. And then it turns out to also be legal to then transfer that irrational debt onto the company you just bought. So you borrow $billions, but then make it a problem for other people—in this case, the company’s employees.
So now you’ve saddled the company with massive debts, you start whining that the company isn’t making enough money to service the interest payments on those debts. These are crocodile tears, because you didn’t want to do the deal in the first place. So you’re in a hurry to destroy the company, file for bankruptcy, and stroll away. You start laying people off, because your accountant’s brain sees that the greatest expenditure is on salaries. Save money save money. But you end up laying off the people who were keeping your advertisers (and various other stakeholders, including governments) happy. So now your future potential earnings are slashed and there seems to be zero chance of servicing the debt that you saddled the company with, even after laying off an enormous number of employees.
A death spiral. Chapter 11 the next step, no doubt. So the mugs who loaned you the money to buy the now worthless company don’t get their interest payments.
There isn’t just one person to blame for all this, of course. I mean, the above seems criminal to me, but let’s not forget that the company itself, its board and shareholders, forced the idiot to go through with the purchase when he tried to back out. They knew that the company was over-valued, and the deal on the table was too good to let it go. So they forced it through, knowing it would lead to disaster because the debt would ruin the company.
So these were rats in lifejackets, taking a hefty profit and walking away like fucking Bruce Willis as the company exploded behind them.
Ultimately, I blame Ayn Rand. Because its that insidious ‘philosophy’ that so many undeservedly wealthy people have that lies behind the trashing of peoples’ lives. And in Emo’s case, there’s a fundamental belief that he doesn’t need people because they can be replaced by robots. He thinks robots can drive cars. He thinks twitter is all about the bots. And like a lot of billionaires prepping for the ‘pocalypse, he knows that he’ll need robot servants because pesky people would murder him.
I’ve been reading The Murderbot Diaries again, which is a comforting thought.