this post was submitted on 05 Aug 2026
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[–] p03locke@lemmy.dbzer0.com 8 points 2 weeks ago (1 children)

Yeah, normally I would celebrate this sort of decision, if it wasn't for:

  1. EA
  2. Saudi investors
  3. $55bn
[–] Jake_Farm@sopuli.xyz 1 points 2 weeks ago (1 children)
[–] Rekhyt@lemmy.world 6 points 2 weeks ago (3 children)

These buyouts usually end up being done by dropping the buyout amount into the company as debt. So EA now has $55B in debt to pay off. Time for more layoffs!

This is exactly why Microsoft has been laying people off left and right. They went on a spending spree to buy studios, including $75B for Activision Blizzard, and within like two years started closing studios because they had a giant debt on paper

[–] theneverfox@pawb.social 3 points 2 weeks ago

Yep... Truly insane that it's legal to make a company pay for itself like that. It's a recipe for anti-competitive practice sauce a main course of destruction of wealth creating capabilities

[–] p03locke@lemmy.dbzer0.com 1 points 2 weeks ago

It's $30B in debt, but yeah.

[–] ryannathans@aussie.zone 1 points 2 weeks ago (1 children)

I'm gonna need you to explain how the Saudis paying the shareholders of EA creates an equal sized debt the company (now the Saudis) has to repay

[–] Rekhyt@lemmy.world 1 points 2 weeks ago* (last edited 2 weeks ago)

I haven't looked into the specifics of this buyout, but how they usually work is that the company doing the buyout uses a mix of cash on hand and loans from banks (aka debt) to make the purchase. They use the combined pool of money to pay buy the stock from the shareholders and then when they have a controlling stake in the company, they can tell the company "You owe us the amount of debt we just took to buy you," and since they control the board of the company they can "accept the terms" they've just set for themselves.

This is the exact playbook private equity uses to buy middlingly successful companies and just sell off everything for parts to get a return on their investment.