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They should get hosed. Company stocks are supposed to be a risky asset. If those businesses get bailed out that should be for their value to the world, not for
by FartyMcFarter 7y ago
They should get hosed. Company stocks are supposed to be a risky asset.
If those businesses get bailed out that should be for their value to the world, not for the purpose of rescuing shareholders.
- unlinked_dll 7y agoAny bail out should involve the government diluting shareholder equity. We need airlines sure. But we also need to punish their shortsightedness and get reimbursed for the trouble. They operate razor thin margins, but somehow used all their cash on buybacks while increasing how levered they were. That doesn't deserve saving. I'd go so far as to say that the government should take a 51% stake in return for their bailout money. I'm not saying nationalize the businesses or hold that controlling position indefinitely, but just for the time being to reorganize and guarantee the bailout money is used appropriately and executives fired for juicing their options with buybacks.