4 ms·
> its shares today are worth something because there is still the chance thelat may not happen Doesn't equity go to zero (and reset), if the new capital is not
by blueblisters 6y ago
> its shares today are worth something because there is still the chance thelat may not happen
Doesn't equity go to zero (and reset), if the new capital is not enough to cover the debts?
- LatteLazy 6y agoNo, weirdly enough that’s actually very unusual. They’ll get no dividends for a while and they will be diluted, but they almost always end up with some value. I can’t say I understand it totally, I’m just speaking historically... Plus that’s assuming it even gets that’s far. Hertz may get a fat cheque from the federal government or the companies it’s been buying cars from or some other source. Maybe a competitor will offer something for some locations and stock? This is the thing about stocks that take a tumble. If it’s trading at 5% what it was last month, and it’s actually worth 6%, you can buy at 5 and sell at 6 and make a 20% profit.