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> Bailing them out is OK, but it should be through the government buying equity in those companies (essentially partial or complete nationalization). Additiona
by nordsieck 7y ago
> Bailing them out is OK, but it should be through the government buying equity in those companies (essentially partial or complete nationalization).
Additionally, I think the government should be buying equity at a steep discount - something reasonable but not disastrous like 67%.
- beojan 7y agoIf the company is on the brink of bankruptcy, its stock is going to be close to worthless anyway.
- chii 7y ago> buying equity at a steep discount the gov't "loans" should be the same as the amount of equity obtained. For example, if the book value of the company is $100 , and the debt is $80 (so they need a loan of $80 to cover their debts), then the bailout will dilute all existing shareholders 80%.