They are called zombies, companies so laden with debt that they are just stumbling by on the brink of survival, barely able to pay even the interest on their loans and often just a bad business hit away from dying off for good.
An Associated Press analysis found their numbers have soared to nearly 7,000 publicly traded companies around the world — 2,000 in the United States alone — whiplashed by years of piling up cheap debt followed by stubborn inflation that has pushed borrowing costs to decade highs.
And now many of these mostly small and mid-sized walking wounded could soon be facing their day of reckoning, with due dates looming on hundreds of billions of dollars of loans they may not be able to pay back.
“They’re going to get crushed,” Valens Securities Managing Director Robert Spivey said of the weakest zombies.
A bunch of those companies engaged in financial fuckery: They bought back lots of stock, which pumped up the stock price short-term, and the top executives took huge payouts. As the article described, such shenanigans got the top three execs at Bed Bath & Beyond $140 million in bonuses, but the stock price flatlined and the company failed.
Maybe when the DoJ gets done with Hunter Biden, they can go after those thieves. But I'm not holding my breath.
Then there is Red Lobster
ReplyDeleteRed Lobster files for bankruptcy, says it’s investigating Thai Union’s “undue influence” in shrimp-purchasing decisions
https://www.seafoodsource.com/news/business-finance/red-lobster-files-for-bankruptcy-says-it-s-investigating-thai-union-s-undue-influence-in-shrimp-purchasing-decisions
Thai Union laid off all of their substandard shrimp at exorbitant prices.
The US has robust bankruptcy laws, China does not.