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Jesse Powell
@jespow
For all these companies looking for bailouts, what prevents them from raising capital the old fashioned way? Issue more stock and sell it? Or, maybe sell all the stock you bought back with the rainy day fund you should have been holding on to?
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Jesse Powell
@jespow
As a small fintech, we have capital requirements imposed on us. We have to leave millions of dollars with regulators just in case we blow up and they have to take on the cost of winding down our business. So, why is "2B2F critical infrastructure" allowed to run with 0 reserves?
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Jesse Powell
@jespow
I get that if the government forces you to stop doing business while you continue to incur costs, some support can be expected if the government cares to keep the business alive. But that's not everybody. Lots are dying because of reduced demand and margins/reserves being too low
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Jesse Powell
@jespow
Replying to
@hoffmang
If they're not buying in the market, the price isn't low enough. The price isn't low enough because the company is not selling shares to finance itself. In fact, it may be buying back shares while they're "cheap", expecting bailout. Dilute by 50%, drop price until you hit bids.
6:27 AM · Mar 19, 2020Twitter Web App
Jesse Powell
@jespow
There are many requirements to becoming a public company in the US. If a startup is failing/out of runway, it goes to investors. It might have to do a down round. It might not be able to raise at any price and then it seeks an acquirer. If that doesn't work, it's sold for parts.
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