Buying at $1.04 is taking a bet that the virus will only have a short term effect for 4-5 months and there will be a V shaped recovery. I hope that is the scenario that play's itself out but I am substantially more pessimistic than that.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Having done quite a bit of distressed asset financing/investing imo this package works in no way whatsoever. If you give a loan to a distressed entity you don't give a loan that actually dooms them to more intense distress. This package gives the company time to do its downsizing and then the government doesn't have to do it. Should just go into receivership now. Start again and put the real heat on the government. I would expect the secured lenders to have extensive covenant breaches. The new lending probably asked for waivers as a CP. No-way would I waive if I was secured.
Tried giving you some more reputation for that post which is bang on the money but I have to spread it around first which suggests to me that although you don't post often what you do say is often very insightful. Please post more often.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Buying at $1.04 is taking a bet that the virus will only have a short term effect for 4-5 months and there will be a V shaped recovery. I hope that is the scenario that play's itself out but I am substantially more pessimistic than that.
CMC won’t let me short any more , “ shorting not allowed for this product”. Can only enter a buy , no thanks , have to sit with what I’ve got .
guaranteed no dividends to shareholders for years , but the govt have done very well for themselves with the loan arrangement ( in effect shareholders are paying for the loan well d done govt for a good business deal for tax payers)
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Originally Posted by Dassets
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