Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.
Comical to read this when I just saw a $50 billion dollar sale of EA going private being bought by private equity firms, haha.
My first thought as well. Of companies to lose to further “investor” shittery, I can’t say I’ll lose much sleep over EA if that turns out to be the case.
EA was down the path of being awful, long before that. But yeah…
I was guessing that it was going to be leveraged as a propaganda outlet given the Kushner and Saudi connections, but it does seem more likely that it’ll just be hollowed out and thrown away.
If EA gets bled dry by private equity, it’ll probably be the biggest company to go down that way ever.
Not Sears?
I don’t really know if that’s the same kind of animal though. The Saudi royal family is trying desperately hard to diversify. Into as many different revenue streams as they can. You know to Stave off the coming disaster. So I think maybe they’re actually in it for real with EA, though why you bank on a video game company being a long-term investment I’m not 100% sure. Point is they have so much money now I doubt it’s for a quick profit. They have so many projects right now that are so risky they’re basically burning cash.
When you think about how much money EA’s main soccer title makes from microtransactions alone, it certainly makes sense to buy them out
Assuming the Saudis buy EA out for 55 billion and earnings don’t change much from now on, they’ll recover the expenses in 9 years.