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Offering shares doesn't introduce balance sheet risk like debt does. There is no interest expense. You dilute the shareholders by about 1.67% but if this $80b c
by missedthecue 5mo ago
Offering shares doesn't introduce balance sheet risk like debt does. There is no interest expense. You dilute the shareholders by about 1.67% but if this $80b can be deployed in a way that increases the value of the firm by more than that amount over the long term, it creates value and makes everyone better off, including the diluted shareholders.
The risk if it doesn't work out is that everyone gets diluted 1.67%
- exabrial 5mo agoHh I didn't consider that. Produce more shares, have Berkshire buy them up at a lower price than the public, in exchange for capital right now. Berkshire can sell them for a profit later or participate in earnings. And with their shares at a premium right now, great time to do it.