It's interesting to read some of the recent news items around the Dick Smith collapse.

One recent article reporting in the inquiry focused on what was effectively poor stock control http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11704206 

While there's no doubt this was an issue I cannot help but wonder that it's a smoke screen for the real issue, that is the asset stripping and share price pumping that took place under the stewardship of Anchorage Capital.

I might be a simpleton as far as economics go but I cannot comprehend how a business can be bought for $100 million and sold nine months later for around 500 million.  There has to be slight of hand somewhere in the mix.

Perhaps part of the answer is that it collapsed a sort time later owing 400 million. How could that happen I wonder?  It was only worth 100 million nine months earlier. That's a significant amount of debt to accumulate in nine months.

There seems to be a bit of finger pointing going on and I have to wonder that the private equity industry are doing their best to ensure the mud doesn't stick to them and are are looking for smoke screens and scapegoats.

I mentioned slight of hand earlier, only 10 million dollars of Anchorages capital was used to make the purchase, and they didn't borrow the balance. Have a read here; https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/ 

Then today this article appears which perhaps shows the true colours of some in the private equity business. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11703770 

This sort of financial slight of hand has been going on for years. The Money Machine by Sarah Bartlett make very interesting reading.