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Why would an increase in stock value stop a company from going bankrupt?
by nerddoctor 8y ago
Why would an increase in stock value stop a company from going bankrupt?
- jpalomaki 8y agoMaybe due to arrangements like this: "On or after Dec. 1, 2018, to the debt’s maturity date, the holders can decide to convert the debt into Tesla shares. If Tesla’s stock is above the $359.87 stock price, the holders will likely convert the debt into equity, relieving the company from using $920 million in cash required when the debt comes due in March." https://www.cnbc.com/2018/08/08/elon-musks-tesla-stock-boost-may-lower-financial-pressures-for-the-ca.html https://www.cnbc.com/2018/08/08/elon-musks-tesla-stock-boost...
- Avshalom 8y agoTesla issued a bunch of bonds that come due in March. If the stock price is above ~350 then they can pay off the bonds in by converting them to stock. If it's lower than that they pay them off in cash. https://www.businessinsider.com/tesla-to-pay-march-convertible-debt-cash-stock-report-2018-12 https://www.businessinsider.com/tesla-to-pay-march-convertib...
- deleted 8y ago[deleted]