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Ah, but you don't have to actually assume liabilities, you can only lose as much as the purchase price.. So buying a company with 10 billion in debt and 10 bill
by roundandround 4y ago
Ah, but you don't have to actually assume liabilities, you can only lose as much as the purchase price.. So buying a company with 10 billion in debt and 10 billion in cash for $1 isn't $1 overpriced. It is an opportunity to take a 10 billion bet with "heads I win, tails I walk away chuckling."
- adastra22 4y agoThat’s not how it works. You assume the liabilities too.
- funnymony 4y agoStock owners are not liable. The company is. Right?
- MichaelZuo 4y agoWhen the stock owner is another company that has a majority (or 100%) stake it's usually considered one company for liability purposes, at least in the U.S. Otherwise every company would set up dozens of intermediary shell companies to protect every valuable subsidiary in the hopes of a favorable court ruling if things go belly up.
- kragen 4y agothat kind of is how hollywood and vc firms work
- MichaelZuo 4y agoNo, that's definitely not how VCs work, there's a reason why no singular firm buys up more than half of any company. And probably other folks more knowledgeable on how Hollywood legalities work can confirm a similar taboo exists there.
- roundandround 4y agoIs it hard to sell half a company you bought for a $1? Seems like more of a psychological problem than a technical one.. I mean sure the whole market could realize your purchase was an absurd liability, but they would still be immune as long as they only own their fraction, so unless the whole market prefers your bankruptcy over a free bet..