“Bain is to free market capitalism as The Westboro Baptist Church is to Christianity.”
Gov.Perry was perfectly right when he described Bain as “vulture capitalism” - buy companies who have no debts with borrowed money from banks, to reduce their own risk, gut the companies dry, increasing their debt and reducing the costs by firing the workers, pay the CEOs and personnel from Bain huge salaries and benefits, and 3 or 5 years later resell the companies, after making 150% profit per year. 30% of the companies bought by Bain, filed for bankruptcy, after Bain left. (The average percentage of bankruptcies for other venture companies being 5 to 8%)
No wonder that Romney could make in this way $250 million in 25 years.
“Gov.Perry was perfectly right when he described Bain as “vulture capitalism” “
Romney and Bain bought the company in 2000, loaded KB Toys with millions in debt, then used the money to repurchase Bain stock. By 2004, 365 stores had closed.
Mitt Romney and Bain saw a 900% return on their investment in KB Toys, at the expense of 15,000 jobs.
Worldwide Grinding Systems went belly up after Bain invested in it. The company not only lost 750 jobs, but the federal government had to come in to bail out its pension fund, while Bain walked away with millions in profits.
The Wall Street Journal, aiming for a comprehensive assessment, examined 77 businesses Bain invested in while Mr. Romney led the firm from its 1984 start until early 1999, to see how they fared during Bain’s involvement and shortly afterward.
“Among the findings: 22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses. An additional 8% ran into so much trouble that all of the money Bain invested was lost. [...]
The Journal analysis shows that in total, Bain produced about $2.5 billion in gains for its investors in the 77 deals, on about $1.1 billion invested. Overall, Bain recorded roughly 50% to 80% annual gains in this period”