What are private equity firms?
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Most companies are valued highest by many shareholders after going public, but sometimes the public sours on a company or industry like gasoline auto manufacturing today. When that happens the price of the company can fall enough that it can be a target of people who want to buy the company entirely.
Sometimes they’ll make difficult steps to shrink the company or they will sell of part and separate parts, or sometimes they’ll shut down the whole thing to gain a few assets that are worth more than they paid for the whole company (think of a headquarters tower or something).
Private equity tends to be ruthless about doing the most valuable thing with what’s left of the company which can include closing most or all of the business which means lots of layoffs, so it tends to have pretty negative associations, but it can just hold businesses until the public values them more as an unchanged operation.
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