Reply #14: You are absolutely right [View All]

[KT2000]

When you hear about private equity firms and holding companies - this is the process of buying up businesses to be owned by the one entity. They are then treated as financial instruments for the benefit of the parent company.

They like companies with no debt and lots of cash.
They charge the purchased company high fees for transactions with the parent company - huge fees.
They lay off the workers, move what is left overseas.
They then use the assets of the purchased company as collateral for purchasing more companies. This can put the purchased company heavily into debt. Sometimes bankruptcy follows.

This has been discussed - even in the Wall Street Journal but it is not an issue that catches on. Too bad because this issue and the mergers are indeed concentrating wealth into the hands of a few.