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Podcast: Decoder with Nilay Patel
Episode: Private equity bought out your doctor and bankrupted ToysâRâUs. Hereâs why that matters.
Description: The idea behind private equity or PE is simple: a private equity firm gathers up a bunch of cash, raises some investor cash and takes on a lot of debt to buy various companies, often taking them off the public stock market. Then, they usually install new management and embark on aggressive cost cutting and turnaround programs â mostly because they have to pay down all that debt pretty fast. Then, the company can be sold or taken public again for a hefty profit. But donât worryâif it doesnât work out, the PE firms are extracting fees at every...