4 ms·
How is this a bailout?
by tekla 4y ago
How is this a bailout?
- FollowingTheDao 4y agoA bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy.
- ceejayoz 4y agoI know that's the Wikipedia top-line definition, but further in https://en.wikipedia.org/wiki/Bailout https://en.wikipedia.org/wiki/Bailout: > However, the common use of the phrase occurs where government resources are used to support a failing company typically to prevent a greater problem or financial contagion to other parts of the economy. This is not what's happening in this case.
- colinmorelli 4y agoThis is a very technical definition that effectively makes the word meaningless. Under this definition, most early VC equity rounds are bailouts, initial stock purchases in new companies are bailouts, etc. It is, technically, true. But it’s not very helpful in understanding why these things happen and which are good vs bad.
- FollowingTheDao 4y ago> not very helpful Not very helpful to who? It is very helpful to the average Joe in explaining why they are getting screwed over.
- govg 4y agoIn that case it isn't helpful to the average Joe, since the word's usage for them isn't the same as that of the technical definition. When someone says bailout in media, they mean a government funded action to get someone out of bankruptcy, not a private action to provide liquidity.
- colinmorelli 4y agoNo average joe is getting screwed over by private companies investing money in other private companies, any more today than they were on any previous day where the same things happen. This is not news, and is only relevant because of the crisis. No public dollars are funding this.