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Who is going to invest cash into a business that has to stop operating for N months, while maintaining everyone on payroll?
by bboylen 5y ago
Who is going to invest cash into a business that has to stop operating for N months, while maintaining everyone on payroll?
- gambiting 5y agoWhy would anyone invest anything in this scenario? Most companies in the world operate without any investment whatsoever.
- bboylen 5y agoAs we saw with the covid market crash, a lot of companies (like airlines) don't keep a lot of cash on hand. If they had 0 revenue for several months but still had operating costs, I am assuming they would need a loan
- ericd 5y agoPerhaps one of the many professionals working in distressed debt or special situations? If you're not familiar, there are desks at Goldman, etc called "Special Situations" that focus on relatively niche investment opportunities. Investors just need the price to be right. Would likely be bad for the shareholders, but again, that's part of the punishment.
- bboylen 5y agoThere could be a price that worked but I don't think there are many businesses that can go offline for several months and come back fine. I'm most familiar with the industry I work in, (O&G), where a day not operating is an incredible loss. Is shutting down the oil refineries and petrochemical complexes what is best for the country? I just struggle to see how this wouldn't just punish normal workers and furthermore just make the economy worse off as a whole
- ericd 5y agoThere would be economic damage, no doubt. And maybe to the level where it's politically impossible to enact this kind of thing. And maybe it's a stupid idea :-)