Based on another community member’s post, I have a question for those smarter than me.
Why is the investor Inveniam, who purchased Storj, now a creditor to Storj? I thought the investor was providing the money for development and expecting a return on the investment once development was achieved.
It looks like they loaned money to Storj: a transfer from a parent company to a child company. I’m sure they’d prefer to be paid back out of massive profits over time. But if those massive profits never come… they still want the loan back.
Great question.
Now maybe I have bad news for you.
Better sit down…
I knew I had read about such a constellation somewhere. Exactly this scenario that in specific cases it is possible that the company that has been bought ends up to bear the cost of its own acquistion.
Then I asked AI which confirmed.
Then I searched for more confirmation.
I am not 100% convinced yet but maby this has happened: Leveraged buyout - Wikipedia
https://www.reddit.com/r/TikTokCringe/comments/1jdxuz3/comment/mnk56s8
This is the other “common” way to take over a company - PE firm sets up a shell company that takes out the loan from a bank to cover whatever cost is involved in acquiring the company, and the collateral for said loan(s) is/are almost always the future earnings of said company being bought out.
Once the purchase is complete, the shell company and the newly-acquired company merge since both are now wholly owned by the PE firm so no one is left to object, and the debt used to acquire the company is now leveraged on the company that was purchased.
It’s just speculation that this is what happened but could it fit?
Next thing some will say, is that after 5 minutes in an elevator, someone was convinced to buy a company that was on a continuous expanding trajectory and everyone was celebrating… oh wait.
Exactly.
Now slowy things seem to make sense. Even the community buyout where they try to raise as much capital as possible without disclosing any valuable information.
Now it feels like a playbook. Maybe with a tragic ending.
Let me quote the last part of the Reddit comment:
The rest above doesn’t change much and the fleecing goes on almost exactly as described above, and someone not the PE firm or the bank ends up owning this toxic loan and eating the loss after the company has eventually been stripped of anything of value.
Bearing in mind that the technology is open source, couldn’t Storj go bankrupt and open up again tomorrow as Staurj (pronounced “storage” instead of that ridiculous “storjay”)? 