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But majority of high tech raised equity capital and not debt.
by indus 4y ago
But majority of high tech raised equity capital and not debt.
- morgango 4y agoTrue, but valuations are based on future earnings potential. If the market looks down, then there is the idea that there is less revenue coming in the future, and the company has less capability to sustain a workforce. It really is interest rates.
- indus 4y agofair point.
- metaphor 4y agoI wonder how many of those tech companies that you're alluding to have evergreen provisions baked into their capital structure, and what that means from a cost of equity perspective at the prevailing risk-free rate.
- refurb 4y agoMaybe smaller companies, but large ones carry a lot of debt because it’s cheap. Google has $28B in debt.
- ulfw 4y agoWhich they can pay all back TODAY if they want to. Not tomorrow, not in 10 years. Today. That's how much money they have in the bank.
- refurb 4y agoThat doesn’t change anything. The question was “do they hold debt”. Debt has major tax benefits to it. That’s why companies who don’t really need to issue debt, do.