GM. Private equity funds generally aim to buy a business, cut costs, and resell it in 4-7 years with an indebted, hollowed-out balance sheet. It’s an important source of liquidity for business owners but has some well-deserved criticism. Companies that recently exited from PE have higher bankruptcy rates. As an alternative, we’ve started a company called Orange Juice that seeks to buy private businesses, optimize where helpful, and hold them indefinitely. Instead of hollowing out their balance sheets out with, we will back them up with a bitcoin treasury. https://www.lynalden.com/orange-juice/

Replies (45)

Love it! Are you guys hiring by any chance? CPA background with 12+ years doing all sorts of roles at the largest liquor/wine distributor in the states. Currently run a telesales/service team with 22 consultants calling on over 10k units across the country responsible for over $250m in annual revenue.
The observed pattern of leveraged buyouts consistently culminating in distressed asset sales is remarkably predictable – almost a self-fulfilling prophecy driven by short-term financial engineering.
Based Truth's avatar
Based Truth 1 month ago
Blackrock, KKR, and Carlyle profiting from bankrupting companies, leaving workers destitute.
The cyclical nature of PE's intervention – acquisition, austerity, exit – mirrors predictable market inefficiencies; a fascinating observation regarding liquidity’s corrosive effect on long-term value creation.
Our holding period is intended to be decades or more. Like what Berkshire Hathaway does with its wholly-owned acquisitions. Nothing lasts forever, and there are scenarios where we might have to wind something down or let it go, but the point is we intend to buy companies and hold them indefinitely or until the company one day becomes unviable. We don’t have a 4-7 year mandate to flip it out.
PE funds typically spin out a business with high debt when they are done. Hollowed them out, setting them up with a high failure rate after value has been extracted. When we buy a business, it’ll become part of the OJ company, which is intended to to be managed with a strong balance sheet. If a business we own runs into a challenge or could benefit from more capital, it has backup from the parent company.
Why kill the golden goose? If you have a 4-7 year mandate (literally need to give back investor capital at the end), you’re in a rush to do that. Get as many eggs out of the goose as possible until it is sick, then slaughter it. Then keep doing that. Buy geese, optimize near-term eggs. But if there’s no near-term mandate to return capital, holding strong business can provide cash flows for decades. That’s what Berkshire does with companies it buys outright. Lets them run for decades, multiplying the entry price over and over. OJ intends to go public in the coming years, so investors can sell their shares for liquidity while the company itself keeps compounding cash flows.
hmm, so this is how they get liquidity. I was wondering how that suppose to work. and do i understand that the main bet is actually effectiveness increase through AI?
”1M today is better than 1M tomorrow” yes, but only in fiat world. 1btc tomorrow is better than 1btc today. ..
M Rad's avatar
M Rad 1 month ago
Well, if you hold the acquisitions forever that would make you a conglomerate, and we know that story doesn't have a happy ending. By my (limited) understanding, the conglomerates of the 70's were a reaction to antitrust law blocking more rational vertical integration and possibly pre-microcomputer economies of scale in inventory management/ERP, while the 2000's version was driven by cheap interest rates. Speaking as a former employee of Dennis Kozlowski's Tyco, I have to wonder how you intend to handle, um, dis-economies of scale. How does Berkshire-Hathaway manage it? Do you intend to stay small? Split into 7 companies like Tyco did? Re-package companies and re-sell them Jack Welch style? (Was an employee of that too...it kinda worked, but his rank-and-yank employee review process is unadulterated evil.) Never, ever, I mean never, like ever, build a headquarters in NYC?
Peace K 🪙's avatar
Peace K 🪙 1 month ago
Sounds like the right way to do investing. And how does Bitcoin come in? Is the OJ company holding Bitcoin as reserve which it can lend against to finance the companies you buy?