At work, I've been eating at Lenwich, a sandwich chain with several locations in NYC. The last few times I ate there, the food was lousy. I attributed it to "they had a bad day" and gave them another chance. After 4 bad lunches in a row, I decided to do some digging.

Lenwich was bought out by a hedge fund! It's obvious what happened now. Some bean counter had the brilliant idea "we cut costs by 20% by serving rotten food and goose our profits". They already lost most of their customers! It used to be packed at lunch and now there's almost nobody there. It should be obvious even to the emptiest suit that policy was stupid.

The offensive part is this isn't the first time this has happened to me! One of my favorite lunch spots gets bought out by a hedge fund, cuts the quality, and I can't go there anymore.

I'd rather pay $3-$5 more for non-rotten food, but that isn't an option apparently. I'd much rather they raise prices than cut quality.

There's a cycle of pump and dump.

Restaurant chain serves good food, has customers.

Restaurant chain gets bought out by hedge fund or has an IPO. They cut costs to boost profits, so the investors cash out at the perfect time.

Restaurant eventually goes bankrupt because they lost all their customers. The brand name still has value. Some hedge fund buys the chain out of bankruptcy. The cycle of pump and dump goes back to the beginning. The new owners start serving good food again, advertise to get former customers to give them another chance. The cycle of pump and dump can happen several times at the same restaurant chain.

The key is that, when a restaurant stops serving good food, they don't lose all their customers right away. People remember the food used to be good. This is just enough of window for the "pump" of the pump-and-dump so the investors can cash out with perfect timing.