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> because he simply thought he could run a lot leaner Because he suddenly had to pay interest on that gigantic loan he (and his business associates) took to bu
by xorcist 1y ago
> because he simply thought he could run a lot leaner
Because he suddenly had to pay interest on that gigantic loan he (and his business associates) took to buy Twitter.
It may not be the only reason for everything that happened, but it sure is simple and has some very good explanatory powers.
- huntertwo 1y agoOther companies have different reasons to cut costs, but the incentive is still there.
- xorcist 1y agoStocks are valued against the risk free interest, or so the saying goes. Doubling interest rate from .1% to .2% does a lot for your DCF models, and in this case we went from zero (or in some cases negative) to several percentage units. Of course stock prices tanked. That's what any schoolbook will tell you, and that's what any investor will expect. Companies thus have to start turning dials and adjust parameters to make number go up again.