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.

  • andros_rex@lemmy.world
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    10 hours ago

    Sometimes teenagers ask me about how the stock market works.

    I love explaining shorts, because the reaction is always “how does that even make sense?”

    • F_State@midwest.social
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      10 hours ago

      The short answer (ba dum, tisssss) is that some forms of mutual funds buy a little bit of every stock rather than picking and choosing. Then, for reasons never really made clear, they let other investors borrow those stocks as long as they return them later.