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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

I don't support the bailouts but name me the institutional investor who would buy the new offering but won't buy in the market?

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.

I think that's unrealistic. By that logic any company can go public as long as it lowers it's valuation enough and that is not a true statement.

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.

Sounds like what's about to happen to at least one airline if not more. No airline could complete an offering of equity in the next 30 days.

It's a pretty jacked up if you are running your 2B2F company month-to-month. Agree it'd be hard to pull off on that timeline but if the alternative is shutting down, they'll find a way. I've seen some brutal convertible notes for these emergency bridge situations.

Convertibles can work here indeed. Airlines aren't really 2B2F (hence my original 'let 'em fail' comment) but I get the asset heavy narrow margin guys have problems when the lose half their revenue regardless of prior decisions 1/2

I mean, do you really think United Airlines knew how to invest/save that cash better than their shareholders when they were buying back?

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7:02 AM · Mar 19, 2020Twitter Web App

If they depleted their reserves to the point that they wouldn't be able to survive 30 days with reduced revenue, one does have to question the investment decisions. So, maybe the cash is better off with investors. On the other hand, would responsible investors have refused?

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If they sat on the cash it would have earned 3? 2%