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It doesn't really make sense to me who loans companies money in these circumstances. Aren't they the ones always left holding the bag?
by oh_sigh 6y ago
It doesn't really make sense to me who loans companies money in these circumstances. Aren't they the ones always left holding the bag?
- echelon 6y agoYes and no. They're the first parties in line to pick apart bankrupt companies. The stockholders are the ones left out in the cold.
- oh_sigh 6y agoSame question then...when Icahn or others of his ilk get their claws into a board, why don't rational investors flee like the dickens?
- simonh 6y agoBut Icahn is a stock holder too, just sell when he does. It seems like the debt lenders will just be left with a few stripped bones to chew on.
- Gibbon1 6y agoCouple of things going on. There are a lot of institutional investors where fiduciaries have no skin in the game and are being corrupted via a soft bribery. Central banks have flooded the world with cheap capital. And you have system where stockholders that end up holding the bag (AKA you and your 401k) don't have voting rights.