How private equity helped sink Red Lobster

Analysts say endless shrimp promotion was not the reason Red Lobster filed for bankruptcy. The bigger culprit was the company investing in private equity.
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#RedLobster #PrivateEquity #Bankruptcy

[@barbm8822]

Private equity companies are sinking everything. Restaurants, retail, real estate, even hospitals.

[@ritaroad]

Nursing homes.

[@michaeldelgiudice1057]

YES! and is anyone listening?!

[@alelectric2767]

It’s by design. It’s how they roll

[@pkal244]

Red Lobster and the other businesses listed are sinking ships anyway. They chose to get bought out by private equity because they were headed for bankruptcy anyway. I guess next time just let them fail quicker.

[@julienrockingham-ip4co]

Yeah, but they call me stupid when I say that

[@user-rj8nm9gy6w]

Greed is destroying America.

[@blazeroranger]

Biden and democrats for raised taxes and climate change

[@blazeroranger]

So lock up Biden and whole dems!!!!!!! And lock you up for pulling us all down since you voted for them

[@jogmas12]

But Gordon Gecko 🦎 said greed is good. 😊

[@SSNESS]

Politicians do insider trading

[@ottomatic3123]

Always has.

[@bobbymoss6160]

Private equity should be banned, just like lobbying. Absolutely disgusting.

[@ottomatic3123]

Lobbying is actually crucial to good governance; although, it needs to be robustly regulated. Unfortunately, those who regulate it are the lobbyist's targets.

[@Ikecanada-rh3ju]

@@ottomatic3123how so?

[@stevenboddy4232]

​@ottomatic3123 lobbying is good yes, when done right. What we have is no different than china or russia. Our lobbyists give money for favors, you know, commonly known as bribes.

[@ottomatic3123]

@@Ikecanada-rh3ju Lobbyists have the expertise to advise law makers in the implementaion of good policy. However, this "special interest" is ripe for corruption and the encouragement of bad policy. That's why robust regulation and oversight is necessary.

[@agf1700]

Asset stripping…..think that’s what Blackstone Group does too.

[@alvilla701]

I believe this is one of the reasons why homes are too expensive, probably the main reason

[@flohough1870]

And a lot of that is the problem, with foreign investors being the ones to either buy or finance the purchase.

[@suzyq1607]

Yes and why there is nothing but homes becoming rentals now also !

[@Astrobucks2]

Incorrect. PE owns less than .6% of us single family homes. It's a nothingburger.

[@alvilla701]

@@Astrobucks2 last year about 30% of sold homes were bought by investors I'm not an expert, this is just some information I found in different places, so do your own research

[@JuanMartinez-xf3uz]

Airbnb is largely to blame for that. And NIMBY's with rigid views on zoning laws.

[@Me97202]

Not the endless shrimp. More like the endless greed.

[@angelisa368]

💯

[@TakenTook]

They left out Toys "R" Us on the list of successful companies that were ruined by private equity

[@Astrobucks2]

Toys was dying and would have died on its own without PE help. Also, it's notlike you can't buy toys anywhere else. The demand went to another firm, and those stronger firms hired the employees of toys r us. That's how our economy works.

[@TakenTook]

@@Astrobucks2 -- They were actually holding on pretty well despite Amazon and other online platforms, especially when they still had Babies R Us selling baby clothes and strollers and things. But just like with RED LOBSTER, they had the real estate sold out from underneath them, and had to start paying rent, and that's what finally made it something that couldn't be sustained. At one point, I think the employees were going to try to form a group to buy the company and run it, but they couldn't raise enough money.

[@entezami777]

​@Astrobucks2 is the Easter bunny real in your world too?

[@TakenTook]

@@entezami777 -- Astro probably thinks that the Laffer curve and trickle down economics are valid, too.

[@Astrobucks2]

​@@entezami777 Do me a favor and go buy some toys right now. Let me know if you're able to do so. Thanks

[@anniesshenanigans3815]

Private Equity is how these Billionaires are doubling their income.

[@danielmartin7838]

Cool screen name.

[@mkaltreider5322]

of course "Golden Gate Capital declined to comment." Financial predators for businesses.

[@TeresasOtherLife]

Who are these private equity owners??? U.S. owners? Foreign owners? How is legislation going to stop this hemorrhaging?

[@rick03168]

Big rich people

[@MariaMartinez-researcher]

John Oliver's last show was about those companies. Both American.

[@alexlopez5800]

Foreign owners. Just like housing. Insane and needs to stop

[@josefeibl8230]

You realize that the majority of US government debt is held by foreign countries?

[@TeresasOtherLife]

@@MariaMartinez-researcher Thank you. I did not see that episode.

[@ec5423]

corporate greed like the housing crisis of 08

[@Astrobucks2]

Are we gonna talk about the gse loans which caused it? "everyone deserves a house" mentality pushed by Clinton and Bush, which resulted in cheap money being flooded out of the GSEs to the originators.

[@astormdrain]

@@Astrobucks2 That’s just a small piece of the puzzle. The real culprit is Reagan deregulating the financial sector in the 80s which enabled an escalation of risk-taking that produced the crisis. ARMs did not exist before 1982, and 25 years later they would explode in our faces.

[@MariaMartinez-researcher]

This video is too short to explain all what happened. Please take a look at the recent John Oliver's segment about the subject. This business didn't die a natural death, it was killed, and not by the shrimp.

[@kittycuddler5973]

I've never seen his show. Looked through, couldn't find the episode you are referring to. Can you give me the number or title? I'd like to watch it, thanks.

[@youtubewatcher4603]

It didn’t help that they dropped all of the less expensive shrimp suppliers.

[@TravelDaIslands]

Thank you he did go into more detail. God bless you.

[@ShannonsBibleStudy]

They didn't do a great job of explaining private equity firms or asset stripping. Their references weren't helpful.

[@Neuzahnstein]

@@kittycuddler5973 maybe last sunday video, which means it will be available tomorrow.

[@joshuauriarte452]

Maybe It's time for this to be illegal? It should of been banned decades ago as it harms more then saves.

[@bobbymoss6160]

Your favorite politicians in Washington DC is getting so much kickback they'll never be banned.

[@briancollins3704]

Go live in the country you support.

[@IRaoulDuke]

No way dude how are our elected rulers gonna make cash?

[@jonnyveltri610]

Vote differently next time my friend!

[@tishw4576]

A seafood restaurant is one thing, hospitals and medical facilities are completely different. You heard of small town hospitals closing? Guess what? They aren't money makers so they are shut down and hard working, tax paying, private insurance paying citizens have no emergency or local care in their area.

[@mph5896]

Small hospital system I work for, the high up management pays themselves enormous pay. CEO makes $7m a year, next guy down $4m. Money needed to take care of patients.

[@bryanx590]

The GOPs prime directive is to turn public tax money into private wealth. They will privatize, Hospitals, Prisons, Roads, Military soldiers/logistics, Social Security, HealthCare, and take the tax money. They turn public tax money they normal can`t touch because its not theirs into money that is now theirs threw legal privatization. They then share it with the shareholders of the private companies that normally would be a public/government agency doing the work. They are all about the money. That's why they come to Washington and they will distract you with things. Donald Trump talks about 50 different things each time he speaks to get you not to think about his conviction. The governor of Florida is telling you to fear WOKE when he just passed a law requiring you to get permission from insurance companies to sue them.

[@whitetrashmillionare4858]

@@bryanx590 It's the rich Democrat voting CEOs

[@mia1shooter]

Red lobster have been doing endless shrimp fir decades...its not the issue

[@UnicornDreamsPastelSkies]

Agreed, it wasn't until last year when endless shrimp became PERMANENT that it became PART of the problem... just yes, certainly not the WHOLE problem, a lot of it really began in 2014 with private equity and property leasebacks.

[@JohnSmith-qe6fb]

I worked for a small bus company that did the same thing- locked the doors and didn't let anyone know they shut down. We showed up to a chained door and no idea we were out of a job. Despicable.

[@libiure]

i worked in a grocery story chain corporate office in the 90's - we closed a grocery store - the owner put a chain on the door at 3am - didn't even tell the managers - it's to prevent theft - when people know that they are losing their jobs - they have nothing to lose by stealing or giving away the store ...

[@anythingandeverythingABCLife]

you acting like you got scammed, just like the guy in this video. the business shut down; they had major big problems to deal with..

[@libiure]

@@anythingandeverythingABCLife the workers are expected to be loyal to the company and to give a 2-week notice when quitting - but businesses' loyalty is only to their bottom line - i think it's cold - when we closed down my friends' business in 2020 we gave the employees a 3 month notice and a $1/hour raise for the last 3 months so they could get a larger unemployment check - but that's rare for a company to do ..

[@user-du4ky2fy7q]

American corporations do this every day in foreign countries. They close down shop and never pay the workers.

[@theshamlock]

Private equity ruins everything except the investors' bank accounts.

[@brad238899]

You lost your job because of Private Equity then your dog gets sick and you go to the vet where you get a $4000 bill for what used to be $400 because of.... You guessed it. Private Equity.

[@nicolewembley3093]

We knew it was more then all you can eat shrimp, which is never a bright idea. It was much deeper, good report.

[@Astrobucks2]

Once again, NBC news getting it wrong with a half baked story. They throw up a clip of Pretty Woman and call it a day. lol

[@robd7934]

Another casualty of private equity’s corporate greed. They did far more damage than the bottomless shrimp! How private equity is legal is beyond me.

[@Astrobucks2]

Red Lobster was a dying business with an aging customer base. PE wasn't the issue, the dying business was the issue.

[@robd7934]

@Astrobucks2 Red Lobster is definitely a dying business. The brand is very stale, and when I lived near one, only old boomers dined there. That said private equity didn't help. It never does.

[@siriusgd4753]

How private equity is destroying everything American. Corporate greed goes unchecked. Just as the Republicans want it.

[@SouthernAngler]

Republicans? Democrats don't care anymore about these matters... why are they silent. they are on the payroll. this has been going on for a long time now.

[@IRaoulDuke]

Weird how no democrats put forth bills to outlaw it, ever. Buh buh Republicans......🐑🐑

[@whitetrashmillionare4858]

More like the election stealing Democrats would do!

[@michaelfincham2749]

When I hear private equity, I think PIRATES. I also think. How long will this company survive.

[@user-wr4yl7tx3w]

Trump will give private equity whatever they want.

[@SouthernAngler]

you are correct but so does Biden.

[@user-du4ky2fy7q]

YEs. Trump got rid of all the financial protection laws that could have prevented this mess. and the GOP applauded him for it

[@ricnyc2759]

They own everything. Any time another company starts to grow, private equity buys them. It's "capitalism" with no competition.

[@jameshoeve4466]

Constant corporate crime. Crooks.

[@waterfuntimes]

Another business gutted by PE. They're literally shutting America down, while selling off assets and pocketing the profits.

[@SSNESS]

Mitt Romney does this

[@forgingstrength6119]

Private equity has destroyed many industries.

[@brettr5188]

Finally an accurate report, not blaming endless shrimp which had such a small loss compared to the companies overall debt.

[@truthiscensored]

Red Lobster been running Endless Shrimp promotion forever. I worked at Red Lobster in 2002 -2010 off and on, and they had the promotion back then...plus the promotion only last like a month or 6 weeks. They do lose money during the promotion but that ain't the sole reason. And I feel the worker's pain. One Red Lobster location I worked at closed at a moment's notice. One day we had jobs, the next day we didn't. The least they can do is give a heads up, so people can find other jobs or make plans

[@DemarcusQ]

With high prices like $200 Million for rent, it’s no wonder little companies dealing with money want MORE of it to be on the same level as everyone else who’s rich. There’s a new quota in people, if your bank account is $1000 shorter you’re just not doing good enough.

[@markstocker5121]

Vulture capitalism..

[@h0lyavenger]

how private equity will be the downfall of america

[@wiskyd]

Yes but they don't care, they only care about themselves.

[@selanryn5849]

Remember, Reagan promised the wealth would start trickling down any day now.

[@Betty-ub1jc]

Yes, I don't understand why people seem to think that he was some type of great/good president. Along with his kooky wife who got her advice from psychics, while whispering in his ear, telling him what to do as president. He ruined schools in California and health care for the mentally ill 😤

[@aroundandround]

Finally media wakes up. I was laughing at how naive the popular media narrative was until recently. Almost like no journalist had any idea of how small $11M is relative to the company’s book value and couldn’t bother doing the slightest bit of research.

[@loreneaustin5304]

They can't blame it on all you can eat Shrimp. Back to the 80's. Watch your money and future.

[@Suitednlooted]

Endless shrimp has always been around. I don’t known why the media was pushing this narrative.

[@FGH9G]

YES! It's about time the mainstream media speaks out against private equity!

[@jeffmacarthur9722]

These folks are shellfish…

[@bobcostas5094]

I love Red Lobster. The food, the atmosphere, the friendly staff, and the amazing memories.

[@teksight9714]

Private equity killed Toys R Us

[@Rushinator1]

Why am I not surprised that the endless shrimp was a scapegoat to put the blame on customers when it was the greedy executives who stripped the company & caused the company to lose $200M/year which is nothing compared to the endless shrimp loss leader.

[@AlexRodri912]

So if got this . A firm purchased a company that is on decline. However they have valuable assets like real estate. So they sell the real estate, make more money that way than keeping the restaurant opened. Then file for bankruptcy and the law shields them from paying all those taxes? That’s a genius way to get out of a failing business.

[@Love-nj2fw]

Private equity is the devil reincarnated, hilarious they blamed it on endless shrimp

[@reecespbcups]

In 2022 Red Lobster had $2Billion+ in assets

[@neilkurzman4907]

No, it didn’t the hedge fund that bought it sold all the real estate off and then negotiated higher than market leases for all its locations

[@reecespbcups]

@@neilkurzman4907 you’ve parroted the vid…red lobster was solvent and had Billions in revenue in 2022 🚨 the private equity strategy gutted their viability.

[@adamzielinski2001]

Wow how sad 😢. Their CEOs should be held accountable. I guess the trickle down effect economics didn’t work here hunh Trumpers?

[@EricSchumann007]

No Levite squire strip Realestate then the china company forced soul source their ship and jacked up the price

[@adamzielinski2001]

@@EricSchumann007 nice try on the name calling. I know thats derogatory Philistine Giant. Also misinformation on Red Lobster being involved in China 🇨🇳. There’s no proof of such a claim. Just because you think we don’t read the Bible doesn’t mean you need to mislead the public with disinformation or name call.

[@adamzielinski2001]

@@EricSchumann007 Also thou speak terrible English. Perhaps educate yourself in research before making derogatory comments and insulting others.

[@williebeamon3083]

What does Trump have to do with any of it? 2014 was an Obama year when golden gate capital bought red lobster if you want to be stupid and petty.

[@waterfuntimes]

Asset stripping... "So it's sorta like stealing cars and selling off the parts"...

[@user-iy3dx1zl9q]

private equity stuggles with quality of life issues. Who coulda guessed that.

[@marykeys10]

Private equity works like a pack of locusts

[@pwu8194]

The same thing happened to IBM. Nowadays, IBM rent its buildings. It doesn't own them anymore.

[@roachtoasties]

I agree endless shrimp was nonsense. Why did all the news organizations keep reporting that crap?

[@jmack8640]

Because media is owned by.... Private Equity!

[@grayrabbit2211]

@0:56 -- He called it Red Slobster! That's what I called it too after seeing too many Red Lobster patrons acting like slobs.

[@elizebanarsee6767]

Your point being?

[@mochi_salamanders]

Restaurants say they don't tell anyone about closure because everyone will quit and they won't be able to staff the last week. It's a despicable thing. I've seen it at EVERY restaurant closure I've ever seen and usually management will have a two or three day heads up, although sometimes they don't find out until that morning. The industry is completely income driven and all nods to human decency are done for PR and stock holders. The general shadiness has gotten so much worse since the public stock optional of most corporate chains, and also since COVID.

[@user-ll4lf5go1m]

Private equity=another way the super rich get richer and the rest of us suffer.

[@iamkayhud]

The moment a company is sold to a private equity company sell your stock because the writing is on the wall!! If you hold that stock for too long you’ll take a hefty loss.

[@porquee]

We're running out of nonviolent solutions to deal with these people

[@danmark1731]

Glad they mentioned that there are times that it is a benefit. Comes down to the boards of these companies and lack of good faith

[@carl-cr7rp]

Government needs to step in and control this BS.

[@jimcypher]

"It's a bust out." - Tony Soprano

[@GodSonBlessed]

We all knew it was bs when they blamed the endless shrimp.

[@Zeus0886]

They just sucking out all the value out of everything and just leaving it to rot

[@kimberlyfamoly1963]

All these big company's buying up the smaller reginal, family or closely held owned companies have runed many of them. When this happens the quality goes down and customers just stop going.

[@GregoryCunningham]

Thank you for the honest reporting. They think we are stupid enough to believe their lies.

[@bobzelley5100]

21 Pennsylvania elder care facilities bought by a Private equity firm filed for bankruptcy in past two weeks . 12 facilities in the Pittsburgh area .

[@MikeFoster-sy8jl]

Old red lobster location turned into a new bank I’ve never heard of

[@Gary-ee3kq]

New credit unions are opening up here. Debt and lending is a biz that will never go away as long as we stay a capitalistic society.

[@williebeamon3083]

This is how black rock will make us eat bugs. Take notice.

[@StanHowse]

Yup..

[@DemarcusQ]

Selling lobster shouldn’t be this hard. It’s greed, envy, comparison in colleagues that let their place of business get to their head and later feel like they deserve just as much as you if not more. Now nobody gets paid.

[@danielleweber8914]

Safeway was saved? Safeway used to be a great grocery store with great tasting and affordable deli items. Now, it is an absolute mess with stressed out overworked staff and irritated shoppers

[@TheDigitalGrowthHacksClub]

They could have just licensed them dang biscuits for cashflow...

[@nightrunner1456]

35-year ago prices were too high, on what you were getting! I work at a quality Restaurant, great real food and a great price.

[@jwood8397]

Long John Silvers did that in the town I lived in. Overnight, took down the signs, drive up menu, everything. And stuck up a sign for the employees

[@waterfuntimes]

From Google: "In November 2022, Long John Silver's was acquired by Four Oaks Partners, a group of investors led by Bob Jenkins, himself a Long John Silver's franchisee and president of Charter Foods."

[@managingmonasmoula9811]

It’s like these companies are taking a wad of cash from the devil at a critical time. Then the devil drags the company through the mud and so far down that there is no redemption or survival. What a disaster!

[@ThailandEnthusiast]

Rent is the biggest reason for businesses to go under for both small and big.

[@joshuapaul349]

A faceless corporation didn't fill you in? Shocker.

[@jeffperteet2327]

They will be coming for legacy television networks eventually

[@user-fs6fv3qy8f]

Sinclair is way ahead of you

[@Grace285]

I stopped going to red lobster when they took catfish off the menu. These chain restaurants have their tried and true customers and they want to come in and put these fancy menus when people aren’t coming to these restaurants for all of that.

[@user-dh2uy8uh1n]

This happens many times when private equity funds come in. They load on debt and pull out the money, leaving a shell which is unable to sustain operations. By the time things collapse, they have removed their investment and everyone left looses. It is deliberate pursuit of short term returns instead of sustained operations.

[@josephdell8056]

Its absolutely pathetic that workers werent at least told of the closing!!!!

[@hukabuktx6766]

Kind of a mafia type a situation.

[@josefeibl8230]

Not at all, must be a clueless capital fund investor.

[@user-fp8hq3bx1b]

I’m looking forward to the Red Lobster documentary.

[@RayNLA]

It’s like refinancing your home pocketing the equity, then walking away from it!

[@b.m2133]

I knew a $11 Million loss wouldn't close Red Lobster. You'd be surprised how much debt these large companies run on and in my opinion, barely can pay back the loans.

[@liatris69]

We can’t have nice things.

[@DrJeffreyTran]

Wait till you see private equity in healthcare. Be smart, ask if your doctor is a corporate owned doctor and run!

[@chihirostargazer6573]

Everything will be corporate owned if people don't stop this greed. Without strict regulations to protect society, capitalism turns into corporatism.

[@goodpainlive]

Bought the chain, bled the company blind and let it go bankrupt while they lined their pockets. Corporate raiders.

[@derek04151]

They sucked it bone dry and then shut it down.

[@Grandizer8989]

My neighbors father literally invented Private Equity awhile back. Now his son runs a PE firm in Boston. Nice guy though.

[@veramae4098]

This is what happened to Sears.

[@johnharbaugh9471]

When did a private equity company save a business? Ever? Name three times (3) please.

[@SouthernAngler]

Apollo group did this to an aluminum smelter in Missouri and currently dismantling what was the great ALCOA aluminum plant in Tennessee. ALCOA was instrumental in the war effort during WW2 . guess those days are gone. we gotta make some more money right... the folks in Tennessee have no idea what's coming. learn about these companies and their executives. they already own more than you can imagine. learn about what thomas Jefferson and john adams truly thought about economics... this is not what was intended.

[@hitendoshi108]

Usually Private Equity firms are on the lookout for businesses with low levels of debt and valuable physical assets that they can end up owning/controlling via an LBO (Leveraged Buyout) by promising the top management and ownership a lucrative amount to convince them to sell, then taking on a lot of debt to fund the purchase of their business (some of those proceeds go to payoff the current management), and finally stripping the business of its key assets and transferring the debt to the business. These firms want to end up secretly owning everything while leaving governments and people in debt.

[@drwisdom1]

I like that their are two reasons for Red Lobster's failure. The second reason is financial and logically explained by numbers while the original reason is clickbait BS about people eating too much and somehow not being able to control it.

[@JudgeCrater22]

Private Equity = Wolves Of Wall Street

[@SA-ks9vz]

Private equity should be banned, there very little good and a lot bad.

[@venganzamujer354]

The one by me in California wAs super dirty…..the silverware wasn’t even washed looked like

[@Case16710]

Dead Lobster

[@user-qu8lt3hf7e]

Republicans fault

[@JohnPublic-dk7zd]

Communist...

[@josefeibl8230]

Nice try. Like inflation, high interest rates and energy costs? Or like Obama couldn't save the consumer mortgages? He saved Wallstreet and the Auto industry.

[@wiskyd]

ITS BOTH SIDES, they all get donations

[@user-qu8lt3hf7e]

@@wiskyd nope Republicans fault

[@wiskyd]

@user-qu8lt3hf7e the rats don't see blue or red only green the rest is a charade

[@stevenholman9288]

The companies can also do that before any private equity gets in volved.

[@robertlee6338]

This is very misleading, the reason occurs is becuase the original sellers want too much money

[@J4sse]

Declining to comment should be optional.

[@brianst.bernard1009]

I thought it was the bottomless shrimp 😂😂

[@UnicornDreamsPastelSkies]

"Private equity firm." **Cue Price is Right losing horns**

[@subaruamazon]

they are also buying local newpapers and selling off the real estates. same with bus stations. same with trailer parks. land is valuable.