The real Olive Garden scandal: Why greedy hedge funders suddenly care so much about breadsticks
Remember that “hilarious” report last week ripping the chain eatery to pieces? The back story will infuriate you
http://www.salon.com/2014/09/17/the_real_olive_garden_scandal_why_greedy_hedge_funders_suddenly_care_so_much_about_breadsticks/
This is really the core problem with our ‘capitalistic’ society, the thieves have been put in charge. I recall reading a case study when I was back in MBA school, more than 20 ago, which was already many years old already: a predatory investor had figured out that some lumber company (long since gone now, I imagine, but I recall it being a well-known name at the time) that owned thousands of acres of mature forest carried the land on the books for the original purchase value. Realizing that the stock was grossly undervalued as a consequence, he got a bunch of cronies to pool their money to purchase a controlling interest in the stock (which is almost always way, way less than 51%, sometimes can be as little as 1 or 2%), then immediately had the land appraised which caused the stock price to skyrocket. Not content with that, he then proceeded to have all the mature forest (and some of the immature forest) logged all at once, which not only destroyed the assets of the company but caused the price of lumber to crash. Then he sold the stock before anyone was smart enough to do the calculations and realize the company was now valueless and made a humongous pile of money. That the company was completely destroyed and the livelihood of thousands of people permanently thrown in the crapper was totally fine, it was all about the bucks. This guy (don’t remember his name now, but it wasn’t like it was a secret) was sort of the trigger that lead to the massive amount of ‘corporate raiding’ that been going on since and is manifest today as the hedge funds that pick off poorly controlled companies (generally meaning that there is no committed executive with lots of stock and those stock holders that do own large blocks don’t care about the longevity of the company) that are undervalued for some reason and destroy them in the name of ‘capitalism’.
Ain’t America Grand?
