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The Swarm Lounge
General Investing and Economics Discussion - No Politics
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<blockquote data-quote="Deleted member 2897" data-source="post: 705325"><p>The aid package isn't final, so we'll see when we get something passed, but apparently Mnuchin said when it came to the corporate bailouts that they would be taking equity stakes in the companies.</p><p><a href="https://www.wsj.com/articles/mnuchin-indicates-u-s-to-take-stakes-in-airlines-in-exchange-for-grants-11585229047" target="_blank">https://www.wsj.com/articles/mnuchin-indicates-u-s-to-take-stakes-in-airlines-in-exchange-for-grants-11585229047</a></p><p></p><p>I mean, if you're not just going to hand them free money, a loan won't do crap. All that will do is hang a debt weight around the companies' necks. So equity is really the only answer if you're not going to play with monopoly money. Hopefully once the economy turns around they can then get their money back. Will the airline executives go for it? It dilutes them, but so does a bankruptcy filing, although that typically wipes out the bondholders and you have control over stock issuance back to yourself.</p></blockquote><p></p>
[QUOTE="Deleted member 2897, post: 705325"] The aid package isn't final, so we'll see when we get something passed, but apparently Mnuchin said when it came to the corporate bailouts that they would be taking equity stakes in the companies. [URL]https://www.wsj.com/articles/mnuchin-indicates-u-s-to-take-stakes-in-airlines-in-exchange-for-grants-11585229047[/URL] I mean, if you're not just going to hand them free money, a loan won't do crap. All that will do is hang a debt weight around the companies' necks. So equity is really the only answer if you're not going to play with monopoly money. Hopefully once the economy turns around they can then get their money back. Will the airline executives go for it? It dilutes them, but so does a bankruptcy filing, although that typically wipes out the bondholders and you have control over stock issuance back to yourself. [/QUOTE]
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