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The $700M is a loan. Misleading headline...
by lazyjones 6y ago
The $700M is a loan. Misleading headline...
- MikeTheGreat 6y agoThe full headline is "In unusual deal, U.S. Treasury to acquire 30 percent of trucking company in exchange for $700 million loan" I wonder if a better title would be "Treasury to acquire 30% of 120M company in exchange for 700M loan"
- MikeTheGreat 6y agoActually - I can't find where the 120M figure was obtained from. Does anyone else know where that number in the title came from?
- magneticnorth 6y agoGood question, maybe the article link changed? This article talks about the company's valuation: only $70 million as of Tuesday's close, but up a lot today after this news. https://www.cnn.com/2020/07/01/business/yrc-federal-loan/index.html https://www.cnn.com/2020/07/01/business/yrc-federal-loan/ind...
- sunstone 6y agoWell that's disappointing. I was expecting it to be a Trump Casino in Atlantic City.
- greenyoda 6y agoTrue, but if the company can't repay the loan, its creditors will have to be repaid from the bankrupt company's assets, so one possible outcome would be that Treasury ends up paying $700M for the liquidated assets of a company worth much less than that. On the other hand, if the company survives and the stock price rises to above where Treasury bought it at, Treasury could make a profit when it sells its shares.
- phonon 6y agoWell, assuming the company does not waste the loan proceeds, they would be trying to get back $700 MM from a company with $820 MM in assets.