Welcome to the days of the hostile takeover and forced merger & acquisition, courtesy of self-endorsed tycoons, signature Silicon Valley maniacs, melancholic millionaires, moronic Tabby Cats®, self-proclaimed “genius IQs“, censorship megalomaniacs and of course, the Bully Billys™. This time around though, the HTs and FM&As are masked by a quaint….smile.
That beguiling smile masquerades as a “company”, which is now a drag; it’s a drain upon one’s sanity. Pithy realism compromised by societal complexities beyond measure…but hear me out. I’m not here to kick a surrealistic push into everyday dilly-dally and imaginary Pixar® excursions. Psychosocial pathologies that dance up-and-down the hallways and lobbies of venture capital and private equity firms have drawn up a drafty wind that has blown the dust off the decaying body of corporate raiding; reanimating the flesh and blood-boned SPAC.
My take doesn’t require a pre-packaged biblical allusion. This is a peril upon which necessitates an antidote from structured capital flight in the form of private equity’s “easy suasion”. Everyone’s guided off the crooked vibe from monetary superficiality…and moving to Austin and Miami ain’t gon’ cut it. Perhaps persuasive swings can make the digital monkey budge, but a small percentage of the movers and shakers can’t be moved emotionally. It’s that loud, amplified cha-ching-ching that’ll get the entrepreneurial footprint to leave a pathway for others to follow. Where the money goes…
Definitions need an update. A corporate raider isn’t just a male-human or a woman-human with the signature goat-face. Rather, we’re encumbered with the $3,000 dollar suit Wall Street-er; or a sadly-expressed vagina, notably endorsed by Revlon® and Gloria Steinem, who wantonly bleeds on the pant-leg of an unbreakable institution. A corporate raider is a direct representation of greed’s exoticism, further illustrating how warped the society from which the raider emerges is, existentially. Acquiring wealth is not centered on all-American striving; the corporate raider doesn’t “struggle”.
Raider-derivativeness morphed into special purpose acquisition companies in the latter decades prior to the close of the 20th century.
Enter the VC. IPOs are on the slo-mo, so gameplay is dog-eared on obtaining the greenbacks swiftly. Fundamental transform on its back. Crusty ethnocentrism embodied in the form of Bay Area rust signifies that those still emboldened by the Obama administration. These people don’t go away, and truth is, some of us (“the hopeful future”) need them need their money long for the money they have access to. VC worldview does not convey a cultural dominance of new technology; it’s a race to the mountain top. Capitalist property theory denotes that a capitalist economy exits a recession faster than socialist property theory or a communist property theory. Perhaps, with the resurgence of raiders, I mean, SPACs–it is a tell-tell sign that the “bidding wars” are around the corner because most people do not know the difference between real value, market value and theoretical value.
Crater-faced venture capitalists crave their fifteen minutes of fame as semi-celebrities (Chamath, Mark Cuban, etc.) whose angles of adulation are frosted over with politicizations galore. Aside from 2020 being the ingress of STUPID-19, venture capitalists CAPITALIZED on the victimized [by way of white supremacy] namesakes of George Floyd and Breonna Taylor and proceeded to feign favorability for Foundational Black American entrepreneurs and startup founders by a deliberate glaze-over of economical efforts kick-fired by creators such as myself. Real quick and swift to switch to changing faces: from one day acknowledging the fledgling monetary investing in Foundational Black Americans gifted with the economic benching to re-focusing on how Tarana Burke correctly used Kingsford® charcoal briquettes for makeup. Even better than Al Jolson ever used burnt cork. Black venture capitalists are a stigler for remaining frozen in fixture in pictures, never a catalyst to initiate a new paradigm to catapult the still unidentified startup founder: heteronormative Foundational Black American men.
Venture capitalists are endeared to the Machiavellian viewpoint of being deceptive; non-benevolent and beholden to attempt at seizing upon a thing “when the time is right“. Just ask any one of Jeffrey Epstein’s Bay Area-contemporaries about the good ol’ days of “e-commerce”, when investors would dump billions of dollars in “startups” that they intentionally overvalued their earnings potential and once it was revealed that most of those startups were nothing more than four or five gayfer Gen-Y frat-boys from Stanford or Berkeley all cozied-up in a plush office with “billions” in outstanding stock, NO CASH ASSETS or assets of any kind except for a server and about six, overly-expensive Mac Pros. Investors wanted to save face so they pulled the plug.
Venture capitalists are not known for making the correct decision to invest in something. Nine times out of ten, they’ll choose to make an idiot’s dream come true; just look at the miscreants who dumped money into electric vehicle hardliners (Tesla), “diversity and inclusion” programs at Apple (“sensitivity training”), the semi-educated “engineers” at Intel (machine learning and “AI”), security (“spying”), delivery via drones (more “spying”) and anything else viable to be scarfed-up via SPACs. VCs are more likely to orchestrate paths to misery.
Over a century ago, there was a man named Bernard Kroger and he sold groceries. He made lots of money doing so, so much to the point where Kroger’s expanded to fill-in the United States. There was also a very evil, contrived company called KKR (Kohlberg Kravis and Roberts).
KKR wanted Kroger’s badly so KKR started buying up Kroger’s stocks. Understand that once KKR owns 51% of Kroger’s stock it (KKR) gets to own and control Kroger’s. Historically, Kroger’s sat on piles of cash (not cryptocurrency), even before the Great Depression. Kroger’s, like P&G and other companies, never lost a dime during the Great Depression. They turned a profit every quarter and they continued to sit on piles and piles of cash. In reference to the article, let’s fast-forward to the 1980s and 1990s, also known as the era of the corporate raiders.
KKR decides to make their move. Kroger’s takes their huge piles (plural) of cash and pays down a large amount of DEBT, refinances their loans at a lower rate. Kroger’s can now pay a larger dividend to stockholders, which pleases stockholders and the value of Kroger’s stock starts to rise. With the remaining piles of cash, Kroger’s starts to buy back its own outstanding stock right off of the stock market. An exemplification of supply and demand. Kroger’s stock is in great demand because of its increasing value in addition to the fact that Kroger’s pays a dividend and buying back its own stock drives the prices UP.
KKR can’t touch that and Kroger’s saves its own ass.
For the mathematically-inclined:
Say Kroger’s has 500 million shares of stock and the price of that stock is $10. How much money would KKR need in order to obtain 51% ownership?
KKR needs 251 million shares of stock at $10/share = $2.51 billion USD to take over Kroger’s.
Kroger’s took piles of cash to pay down its debt so the stock jumps to $12/share. KKR now needs $3.01 billion USD. Don’t forget Kroger’s starts to buy back its own stock, so the price jumps to $18/share. Now KKR needs $4.5 billion.
KKR ain’t got that monaaaaay. KKR is a corporate raider masquerading as an investment group. Likewise, some of these “venture capital firms” / private equity firms operate the same. You invest $100,000 with these SPACs (special purpose acquisition companies), they take your money and other investors’ money and buy up corporations, sell of pieces of it (putting people out of work) to recoup your investment while running the most profitable parts of the companies for a few years to get profits and then shut it down or sell it off putting more people out of work.
The parallels are aplenty…
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