WSJ: Videogame Giant Electronic Arts Near Roughly $50 Billion Deal to Go Private (UPDATE: Acquired by PIF, Silver Lake, and Affinity Partners)
- Thread starter GambinoMakeItWork
- Start date
Ironman
#Knickstape
I ain't even look over this thread.Breh really showed up in the thread ready to try to start an argument because y'all said Microsoft three times.
And I have zero doubt the amount of post complaining about consolidation is less the the number of pages
Just calling out the hypocrisy, consolidation is only a issue for certain folks when it comes from a certain brand
Kornball The Conqueror
Superstar
people have been begging for the end of EA since 2005
Dillah810
Flat Girther
Yeah that was something I didn't event think about until he mentioned it.The server point is a great point tooYea this sets a horrible precedence
Ironman
#Knickstape
This needs to be it but people are far too addicted to bullshyt
Why would private money not be legal in the sense of buying out a corporation?
Nero Christ
Sniper out now on all digital platforms brev
The next Democrat who gets into office has to break these corporations up
Breh really showed up in the thread ready to try to start an argument because y'all said Microsoft three times.
“I told ya this shyt would happen” head ass. Man nobody paying attention to your shyt like that
“I told ya this shyt would happen” head ass. Man nobody paying attention to your shyt like that
You know what, you right.
Dudes just arguing their truths instead of any kinda facts.
ItWasWritten
Superstar
Turkey AliSheikh bout to be on the next madden cover
In general, it's due to how private equity is allowed to leverage debt to make the purchase that they don't have, and likely never would've had. Essentially, the invest funds are borrowing money against the value of the company they're trying to buy in order to buy said company. It'd be like trying to get a mortgage to buy a house using money from a Home Equity Line of Credit based on the equity that the current owners have in the home. If someone like you or I tried doing that, we're probably eating a couple of years for mortgage fraud.
What makes it worse is that the way these leveraged buyouts work, they basically work as if the acquired company took out a loan against its own value (which is why news of these types of acquisitions almost always leaks; it boosts the value of the company), adding that money to whatever the gross payout for shareholders is, and then the invest fund acquires the company for a cash amount, plus assuming whatever debt the acquired company has on the books. So, in this case, if they sale is $55 million, and the company ends up with $20 billion in debt on the books after purchase, private equity REALLY only paid $35 billion cash, and had the company take out a $20 billion loan so they could buy out their shareholders. The acquired company typically remains a wholly owned subsidiary, so if the debt ends up tanking the company, its future bankruptcy doesn't hurt the investment fund, but its potential sale to someone else (usually during bankruptcy) DOES end up being money that goes straight to them. So, not only do they end up paying less out of pocket than they should have for the company, they did it at a discount, since these buyouts usually close at a lower rate than if controlling shares were purchased at market value. Even doubly so when you consider that technically the shareholder buyout is coming partially from debt their own company took out to buy them.
The whole process is done with a goal of extracting maximum value from the company in a five to seven year period, and then either filing for bankruptcy or selling to the next sucker that's willing to kick the debt can down the road.
I mean the saudis are currently funding Undisputed. Wonder if they roll that game over to EA or scrap it for Fight NightNew Fight Night game?
