How Unprofitable Companies Stay In Business
Вставка
- Опубліковано 9 тра 2024
- Some firms sustain their businesses by taking on more debt that they likely could never repay. Economists call them zombie companies. When compared to their peers, zombies are smaller in size and deliver lower returns to investors. These companies distort markets, keeping resources from their fundamentally sound competitors. Banks and governments keep zombie firms alive with bailout loans. As the Fed resets the economy with higher interest rates, many zombie firms are filing for bankruptcy.
Chapters:
00:00 - Introduction
01:46 - Zombies
03:35 - Bankruptcies
06:05 - The Lost Decade
07:15 - Debt and bailouts
Produced, shot and edited by: Carlos Walters
Animation: Alex Wood
Supervising Producer: Lindsey Jacobson
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How Unprofitable Companies Stay In Business
I worked for yellow for seven years. The CEO and other board members never failed to give themselves a performance bonus. They also spent money on side projects to avoid loan repayments. The company was horribly mismanaged for over 15 straight years.
Wow! 😲 I can't believe what you've witnessed during your time at yellow. 🙀 It's pretty disheartening to hear about the CEO and board members giving themselves performance bonuses consistently, while the company was clearly mismanaged for such a long period of time. 😞 It seems like they were more concerned about their personal gain than ensuring the success and growth of the company. 📉 Hopefully, things have improved since then. But nevertheless, your dedication and commitment for seven years is truly commendable! 💪👏
Predatory firm(s).
That is the formula, sadly. The guys get paid well even when the companies die. It’s called value extraction.
Capitalism at work. Greedy executives laugh all the way to the bank while the rest of us are left bankrupt.
AI Bots in UA-cam comments? Never seen that before lol@@Tricia-Tricia
A famous french writer once said : "you don't die because of debts. you die when you can't get new ones".
The founder of Altice said : "When I got my first 50k buisness loan, I couldn't sleep - if I failed, I would have lost everything. Now I owe more than 50 billions and I sleep very well - my bankers don't".
"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."
@scoops2 in recent times it is government that will pick up bill
@@scoops2😂😂😂😂😂
he got bery rich and don't care anymore......a common story of zombies companies.....and govrnment sleep
he got bery rich and don't care anymore......a common story of zombies companies.....and govrnment sleep
In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.
I suggest you offset your real estate and get into stocks, A recession as bad as it can be, provides good buying opportunities in the markets if you're careful and it can also create volatility giving great short-time buy and sell opportunities too. This is not financial advice but get buying, cash isn't king at all at this time!
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750,000,000 bailout and yet paying $234 back… and yet when I’m late on my mortgage my house is in danger 😂
The funniest part of this comment is not the hyperbole , but that you think you matter. That is unless you also facilitate millions of financial transactions across the broader economy.
Well Yellow went under just like a home owner that fails to pay
Trump made a side deal with them obviously 🙄
Can I borrow $750M ???
@@mattweiss7645 here you go bro 🥾enjoy licking it your entire life 😂
The problem is they let small zombie businesses die but when large businesses go bankrupt the government swoops in and bails them out even if they are malicious or did wrong with the profits.
Well said!
It's about choices...🍀
The whole thing is a ponzi. Its working as intended.
It's simple, the big firms, investment banks lobby and pay congress men campaign donetions, plus provide inside information for trading etc exa. Nancy Pelosi. that way politicians will always bail them with public money if they are going under, whilst small shop owners can only pay local politicians/goons for protection who don't have much say in loan weaver
big evil wins most of the time
One of the purposes of tighter monetary policy is to weed out weaker business models and stop misallocation of capital. It is a good thing, not a reason to worry.
yes that includes big corporations, if they are unprofitable they have no reason to be still in business. That would also release a lot of workers so other companies that are actually productive have bigger pool to hire from
only if they're not taking assistance away from other companies.
It is a good thing but we are talking about 10% of public companies.
Easy to say when your livelihood isn't on the line.
TZA
The bigger question is how many of these "zombie" companies are propping up the employment rate. Likely a good amount. If they go, employment will suffer. I've personally worked at at least 2 companies where the finances didn't make sense, and they should have gone out of business (one of them did)
I meancif they go, employment should suffer. The jobs were not necessary anymore. Otherwise they would be valued higher and therefore would still be making money.
Those zombie firms are providing *some* service or product that someone else is buying. It may not be a great service, it might not be a great product, but they are generating revenue somehow, reflecting they do have customers.
When that firm blows up, those customers will go somewhere else to some other firm whose revenue will thereby increase. That other firm will thus hire.
Point being that at least some of the unemployment created by dying zombie firms will be offset by increased employment at firms that benefit from zombie firm collapses. It won't be one for one, but it won't be zero either.
In the case of Yellow Trucking, for instance, the offset might be quite high. More-or-less every truck delivery that Yellow did will have to be backfilled by other trucking firms. It might not be 100%, but it was probably pretty close to it - probably 90%+.
In a socialist economy everyone is employed. 🤣
Thata cause the people in carharge just care about paying themselves and not necessarily making things work. However if this means nitmal people can stay employed than that is best
Most of zombie firms are high growth tech companies and most of jobs are white collar jobs.
I’m surprised it wasn’t mentioned how these companies just rolling their debt into more loans to the point that their loan payments exceed their profits. These companies are basically alive just to make loan payments on their debt. At that point, someone has to call it quits
You can't borrow if no one is willing to lend to you, especially when the lender sees that you don't have the means to pay the higher interest.
@@xiphoid2011that's why these issues build up in lower interest rate environments and expose themselves once interest rates are raised. As long as interest rates are low the zombie companies can continue to exist.
Sounds like the US government
@@xiphoid2011 This. Investors (esp institutional investors) need to take the lion's share of responsibility for this. "Due diligence is hard and time consuming and expensive and we might miss a big opportunity if we move too slow" is a horrifically bad excuse, but easy to do with other people's money. COmpanies raise money...its what they do...esp when they are struggling. You could almost forgive them for it...but blindly investing money in a flim-flam machine is much less forgivable.
Extend and pretend.
Cheap debt and low corporate taxes ONLY give incentive for bad products.
If I want to create an LLC. I would have gotten a low interest loan, sold a bunch of Chinese garbage in a market trend for 18 months, SHORTED by own company, and then allowed my company to dissolve into bankruptcy.
I and my board members would have gotten rich on our profits, gotten additionally wealthy from our short positions, and then walked away unscathed after using the chapter laws and making the tax-payer fund our collapse.
This model has been extremely lucrative since the 1980s.
It’s really just a question of “when are the banks ever going to take responsibility for their mistakes without asking for a bailout?”
With the Fed around they dont have to
Nailed it
Moral Hazzard
They will never. Because large companies and banks are ran by the same MBA poop and swoops. They go in convincing shareholders they know something about running a successful company, do their 5 year stint while making millions in bonuses and then get out of dodge when the business is about to fail.
Exactly
I am pro-freemarket and yet think the companies like Amazon and Uber using bussines models where they lose billions of dollars to destroy small companies on the hope of achieving monoply level control of the market shouldnt be alowed to do that
Exactly, that is how these companies become giants. They are pumped with so much money that they don't make profits for years. Even when the business is not making profits, the CEO'S are still making millions. It's a scam system.
Look at Dennys restaurants, they haven't turned a profit in like 15 years I think but they have locations all over USA.
Especially Amazon. They gather data about fast moving goods and have those same goods manufactured by some white labeling company and sell it under Amazon Basics label by undercutting sellers on its own platform.
It’s not zombie firm that bothers me, it’s the bank or lender that agreed the business model was viable.
Its not always obvious, on paper a plan can look good -- but still be subject to external risks. Once you run out of your line of credit and you can't make payroll or get the next loan you expected -- then you are done.
Sadly bailing out a bank makes more sense than a business.
Just look at China.
Their banks just take deposits and freeze accounts to stop bank runs because Chinese banks are not backed by their government.
When a Chinese bank goes under all accounts loses all of their money, no questions asked.
Most Americans complain about the bails out without seeing how badly the alternative is like how other countries have it.
Dude, the banks agree to lend money because they are all friends.
The bank manager makes the bonus, the zombie company gets the money, and they are all happy.
Later, if the bank goes under, it just gets bailed out by the tax payers.
This capitalist system is all corrupt.
Problem with monetary policy is always the bank approval framework. The incentive to build particular assets or to determine what assets are needed in an economy is always determined and created by the banks(this is of course my view)
Same with companies going public! 🤥
Borrow a bunch of money, pay the CEO and executives well.. then walk away before the bankruptcy.
Socialism for corporations and capitalism for the rest. We pay to keep them alive and they tell us to “lift yourself up by your bootstraps” to be like them…
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They don't talk about really big corps that live paycheck to paycheck in that they pay out all spare capital to investors (in the old days they saved for a rainy day). They have drastically cut or eliminated R&D, i.e. they don't have long term plans. They tell shareholders that the increase in stock price replaces payment of dividends. A hard dip is going to fulfill what Buffett says, "You don't know who's swimming naked until the tide goes out."
PSA: do not confuse startups with zombies. If there is a clear path to profitability, it's a high risk that might pay off in the future (e.g. Uber, Amazon). Zombies are hopeless businesses in established sectors that should have disappeared long ago. Something like Sears.
Most startups are zombies which walk fast.
@@tube.brasil Startups are like children. You spend lots of money raising them, hoping they become self-sufficient.
Zombie companies are like that patient with brain death whose family refuses to disconnect.
Nice try😅
How's your startup doing in this high-interest rate environment?
There is never a clear path to victory in a startup. Even Zuckerberg would never have imagined what the Facebook would become. They are simply extreme risk, extreme return experiments.
I love how this story regarding zombie firms was released on Halloween
I've worked for a few of those zombie companies. One of them did go bankrupt while I was working for them. Twenty years later, they still owe me a month's pay.
Another ex-employer went out of business when they got raided by the police, but that's another story.
Japan's banks didn't want to write off loans because that would have indicated that they didn't expect the borrower to pay the loan back, which would have meant a loss of face for the borrower, something you don't do in Japan. So they kept bad loans on the books for 20-30 years, until the government finally said "Enough!", and made them remove the loans from the books. By then, though, it was way too late for the economy to fully recover.
Nice narrative that has no substance to it
Can I make a friend? I want to study@@MomopilotCool
In my city there was this company that was kept open for 32 years after the first bankruptcie because the judge responsable for it would not allow any lawsuits to take place
Talking about companies like doordash? 😊
:p@@DG-hw8it
Wait so government bailouts negatively affect the economy over time? Woah 😮
Depends on the exact situation. They can be beneficial if used right.
Can I make a friend? I want to study@@placeholdername0000
@@placeholdername0000 Can you please elaborate and take some examples?
@@billcipher2893 The early renewables industry. It wasn't profitable back in the day, but it has since become a great success.
😂 don’t know when it’s gonna burst, but this bubble is certainly getting bigger. But on the bright side, Biden did incentivize certain future industries to take root in America. Hopefully Trump will build on it.
We don’t want to see the biggest economy failing.
This has seemed true, especially since the Great Recession. When times are good, "free enterprise, taxes and regulations stop our hard work ethic and innovation." When times are bad, "we need bail outs, too big to fail, etc."
Negative real interest rates (lower than inflation) will create all kinds of economic distortions and monstrosities.
Agreed. Thankfully, short-term treasury yields have returned to positive. The yield curve is still inverted, though...
I think government bailouts of large companies is one of the worst things that can happen especially banks
I totally agree! 💯 Government bailouts for large companies, especially banks, can be incredibly problematic. 😡 It seems like these companies make risky decisions knowing that they'll be bailed out if things go south. 😤 It's unfair to smaller businesses and individuals who don't receive the same treatment. 🚫 Let's prioritize accountability and fairness in our economic system! 🙌💪
this only happens when money is costless to "create."
Or when the money creator isn't the one that suffers the effects
a number of spacs were created from cheap money... mostly offshore companies (dirty money)... another way of doing you got it... money laundering.
And to borrow. A lot of publicly traded companies main reason to exist now is not their product, but to work the gears of the financial system. Buyback stocks, issue massive 0% corp debt endlessly which means being profitable or caring about your employees is an afterthought to the major shareholders, whom are literally just scamming the system now.
Our economy is running like a circus because it is run by actual clowns.
Simply put- Rich people providing zero value (business) have been getting billions of taxpayer money interest free and totally forgivable(bankruptcy). Now, replace that with a common joe, who got a credit card at 29.99% interest, who is one late payment away loosing its ability to ever borrow and going into downfall with no one to bail out. CAN WE put these people in jail now???
Let me guess, your solution is bigger government.
Never use a credit card unless you are doing it for some sort of reward points and you fully intend to pay off the balance immediately.
Unfortunately theyre alsonthe judges and prosecutors
@@michaelhutchings6602If the growth is in commerce inspectors, auditors, and prosecutors, then yes. Corporations and their executives get away with far too much improprieties if not outright crimes.
It’s unfair that these zombie firms continue to get bailed out by the government and in many ways these get away by not paying taxes.
Great, now I have to spend all day picturing businessmen wandering Manhattan like it's the Walking Dead all over again 😆
Why stay alive just to keep servicing their debts for eternity? It's useless. About rates, the Fed didn't raise further yet the market is going up. Weird. I'd say given this high volatility, wouldn't it be prudent to create a portfolio based on someone else's successful model? I've achieved a remarkable 21% ($130k) return in just four months via the model portfolio approach without entrusting my funds to anyone for management.
My portfolio is not looking so good, and I believe it could perform better. Whose portfolio do you copy?
At present, I work with Lauren Marie Dale. She has shown expertise at its best. Some really amazing stuff. Smart diversification, risk management, with substantial earnings. Yet I only have to copy this automatically in real time using algorithmic trading system. I don't hand funds over.
Well, despite the wild market since 2022, I'm content with the reassuring results. She charges 10% of only profit as performance fee. Don't get burned, mate. Get a help if you have to. Schedule a phone call.
Scam and fraud Bots are getting way smarter.
We are too reliant on banks ("too big to fail") and need to make sure we prepare for situations in which they need to fail without destroying everything they touched.
Who would hold a those bonds? 😢
@1:27, Heyyy, it's downtown Tampa
My take is when a company goes below $1 in price, Nasdaq do not let them do a reverse stock split. It kills stock holder value because when they jump from 0.5 to 5 dollar overnight through reverse stock split they simply invite the same process of shorters to hammer the stock back down to 0.5 dollars again. At 0.5 dollar after the 180 days or 360 day expires , let them simply move over to the OTC Market.
Can I make a friend? I want to study
I once worked for a company that had a bad business model. They lost money continuously, never showed a profit for any quarter AFAIK. Every time they ran out of money, they just issued more stock... AND PEOPLE BOUGHT IT! Hard to believe, but true. Eventually they got acquired by a competitor. It sounds to me like the competitor was no smarter than the stock buyers.
Can I make a friend? I want to study
All these zombie firms and I can’t get a real estate loan 🙄
Why would you want to right now? Are you crazy!?
@@mannsolo6294Because they'd like to move out of the parnets spare bedroom already. Also, why wait for a future interest rate cut that isn't likely to return soon? Even if the markets crash, 0% interest is a *terrible* idea because investors toss money at anything that might make money. And that leads to all kinds of other problems like the ones in this video.
@@mannsolo6294 He wants to think outside of the box.
@@mannsolo6294 🤣🤣🤣
I worked for one in the Tech Sector (if not two)! 1. One had a planned bankruptcy date, and the target bankruptcy date was posted on the fridge, so, none of the employees would be alarmed. I found that alarming. I found another job, and left. The company existed to take the risk, and expenses, and pass revenue to another company. They were looking to hire lots more developers, and I dont know why. They rented a home from the parent company's owner. 2. Another existed, because they assumed all the risk. The company was breaking copyright laws. they eventually got out of it, which I guess, was sortof unplanned. they actually still exist today.
In the decade of a booming economy in combination with low interest rates there was no problem. Cheap money was available to almost every business. Let's take real estate as an example, it was very easy for a company in this sector to borrow money, real estate prices rose on a monthly basis, so a firm in this sector could easily add a lot of leverage to its balance sheet. Now, debt has become way more expensive as interest rates went up, which also leads to the question if the underlying assets (real estate) are still worth that much.
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Look at the cash flow statement and subtract out share based compensation (deduct it instead of having it listed as a net positive) and compare that to the income statement and see how many more (or less) shares outstanding. That will give you a starting basis on IF the company is actually profitable versus getting investor cash.
The counterparties to zombie firms' unpaid debt will receive haircuts. Scrutinize aggregated or securitized debt instruments where bad paper will be laundered with the good.
Also, neither the holders of fixed, longer term low rate loans (mortgages) as well as buyers of longer term, higher rate paper have plans to roll the paper thus contributing to a creditor cash crunch.
The boards of directors of these firms are facing decisions about how to keep their businesses intact or how to move ahead through mergers, acquisitions, etc. The wise investor will take a hard look at the financials of these firms before making a bid. Keeping the firm intact likely includes decisions on dividends and how to keep shareholders interested. Another spot for the investor is to look closely at the financials of these dividend payers.
FREE MARKET. no bailouts
This is the best strategy I've ever come across. Thank you for sharing it with us.
Simply put they are companies that have borrowed too much and don’t have the cash flows to make their bond or loan payments. Of course, as interest rates rise it becomes more expensive to refinance that debt, and defaults accelerate.
Government should not be giving out loans or bailouts or subsidies or welfare or whatever your preferred term is.
There are companies that "make" money and companies that are doing a job. Providing a service or a product is always less profitable than selling air. Why then try to serve the people if you can lie to the people and take their money. Have you thought about the fact that when you shop for food a large amount of what you pay for is water, packaging and advertising. With non food products you pay more than 50% for the advertising.
Legacy costs likely contribute. A new business with gig workers has lower costs than a business that has actual employees, provides them benefits / retirement and an actual living wage without having to work 3 jobs.
Transportation from automobiles, airlines, railroads and all those banks and big insurance companies all have the government safety net of a bailout. Warren Buffett talks about businesses with a "moat" around their business models, but most of his investments are in those businesses he knows government will bailout which is his preferred "moat."
Even the general public felt rich buying million dollar homes paying only 3%. Now with higher interest rate they do not feel wealthy
The general public didn't buy million dollar homes. Most people couldn't afford homes.
Buying an individual stock is a fair investment but its performance level can’t generate high dividends. Diversification is the secret to optimal performance, that’s why I have my interest set on options based on projected growth and performance.
Good approach; diversifying is really key to finance growth. can you explain in full the lnvestment options you’re into, I’m curious•
When it comes to finance growth, it’s wrong to engage in a single option. I suggest diversifying your portfolio into various options with high performance coupled with the experience and aid of a finance Pro will generate bigger returns and balance volatility.
”Do not lay your eggs in one basket.” I engage on various options (real estate, real assets, index/mutual funds, ETFs, annuities, potential stocks and cry-pto, IDOs and many others) with the aid of my finance pro, and so far have acquired so much returns (amount is confidentiaI)
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•IsabeIIe ChIoe Scott•
We had cheap money for too long, 20 years. The printing presses were going l wild especially past 2 years over inflating the economy. Now we are pulling back those dollars.
There hasn’t been any stimulus in the last two years…
Waaaaaaaay higher than 10%. Especially when you consider what the real cost of labour is.
The people talking this video are fine with business failing as long it’s not their banks that needs to be bailed out. 😂
My greatest concern is how to recover from all these economic and global troubles and stay afloat especially with the political power tussle going on in US.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
Please tell me how can I connect to your advisor. My funds are being murdered by inflation, therefore I'm looking for a more profitable investing strategy to put my portfolio to work.
Finding financial advisors like Margaret Johnson Arndt who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
zombie firms in a zombie economy
...that had a 5% GDP growth rate last year
um... that was his point... it's not REAL GDP, it's inflation@@mattweiss7645
@@mattweiss7645Learn your terms, Real GDP was only 2.1%. With 7% inflation, you are in the red buddy. I am sorry that the school system failed your.
@@8platypus "I am sorry that the school system failed your." I'm still waiting, buddy.
It really does feel that way. The moeny is running out, zombie firms, americans exhaussting their pandemic savings, and now the federal gocernment has posted a trillion dollar deficit.
An idea for a video would be dividend payers where you analyze large maturing cash cow companies like Google and PayPal that seem to be in the position of starting to payout growing dividends soon. I’m new in investing and still doing my research.
Im VERY curious who in these unside down companies are taking the largest personal salary & gains. ESPECIALLY when utilizing gov funds.
We outsiders think this is good for US commerce, imagine how many years Amazon and facebook took to be profitable.
When private equity takes over your company raids your pension and then stacks the company with debt. Then starts paying themselves bonuses and there consulting companies huge fees. Thats my view on that Yellow company
Good quality expose 👏
Great piece!
Is part of how we reduce instability not that we are keeping failing companies on life support?
Truly the opposite. You reduce instability by providing safety nets and guarantees. The FDIC and unemployment insurance are great examples of this concept
Your trading tips are a breath of fresh air! Thank you for sharing your expertise with us.
It's a dilemma for the feds when the unemployment figs goes up if they crackdown on these zombie firms-the dividend of compliance !
If you remove government spending, the issue would disappear.
"It seems that auto companies run off of high debt and expecting government bailout."
Yea no sht. 😂 You did it once before
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I started investing in the stock market because of dividends. What matters, in my opinion, is that if you invest and earn more money in addition to dividends, you will be able to live off of dividends without selling. It implies that you can pass that on to your children, giving them a head start in life. I've invested over $600k in dividend stocks over the years; I continue to buy more today and will continue to do so until the price lowers even further.
It's always inspiring to hear from a professional trader who has weathered the storm and come out on top. When your portfolio turns from green to red, it might be unsettling, but if you have invested in great companies, you should just keep adding to them and stick with your plan...
I wholeheartedly concur, which is why I appreciate giving an professionnel trader the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over €1.5 million dollars working with an investment coach for more than two years.
I wholeheartedly concur, which is why I appreciate giving a professional trader the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over $1.5 million dollars working with an investment coach for more than two years📈
I wholeheartedly concur, which is why I appreciate giving an professionnel trader the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over €1.5 million dollars working with an investment coach for more than two years.
Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over €1.5 million dollars working with an investment coach for more than two years.
The audio for this clip was very poorly mixed and processed. It is very hard to hear some speakers while others are much louder.
Companies aren't incentivised to make a profit from a tax perspective, so they pay their employees more and spend more in the business staying around break even at best. Banks enable this behavior by lending out money to larger companies based on revenue numbers rather than on profitability. The bank just want to be prioritized as the first paid bill. The average individual has to play by different rules. Yet it is our country's federal reserve that lends money to the banks and encourages thier behavior.
sounds strange without background music don't it?
Lending money is a risk. Firms are not the problem but the banks that expect bailouts after they give money to every loser that knocks on their door.
Our government with its debt with higher interest rates is taking a beating. It’s hard to print more money when high inflation and 33 trillion in debt.
How about Mullen automotive. They reverse stock split so many times that their list price when it went public is now over 135,000 dollars.Please look at Mullen stock history.
Here another economic problem:
The states are competing to attract new branches of (non-zombie) large corporations for the bet. In doing so, they outdo each other with tax breaks and other promotional gifts. A lot of (tax-)income is lost at the expense of the population. It seems the USA don't care as long as companies are big and rich enough. I have the impression that the middle class is suffering from this.
And yet when the company i work for has profits drop 1% after the most profitable year ever, a bunch of my friends get laid off. wtf what a joke
Most people are told that you only need a good job to get rich. These billionaires are operating on a whole other playing field that most people don’t even know exists.
Zombies often start out relatively healthy (vs distressed) until PE sets up a lecherous relationship with exorbitant management fees and debt placed on them that the zombie company must service. Secondary leasing companies are often setup where the companies must lease previously company owned facilities. Even with all the debt they often actually looked pretty good on paper while interest rates were low. That's because operational cost (no new hiring, fewer rolls of toilet paper, the cleaning company shows up less) are significantly restricted increasing margins. But when they roll the debt over in higher interest rate environment today they are distressed. No way out
Have any of you recently been monitoring your stock portfolios? I've recently suffered some pretty significant losses. A few growth stocks I had invested in looked promising at the time, but things aren't looking so good now. I thought my tech stocks would rise, but they have been falling. I've lost nearly $100,000 in the stock market.
It’s precisely at times like these that investors need to be on guard against the next certainty. You don’t have to act on every forecast, hence i will suggest you get yourself a financial-advisor.
Agreed, instead of panic or following a hearsay, I simply adopted the service of an advisor early 2020 amid covid-outbreak, and so far, I've attained my most measurable financial milestone of $650k after subsequent investments.
Credits to *Sharon Louise Count* one of the best portfolio manager;s out there. she;s well known, you should look her up
I quickly searched her full name and her website appeared instantly, showcasing her impressive qualifications. Thank you for sharing.
Can I make a friend? I want to study@@louis71350
Is'nt Amazon in the same boat. They have'nt been profitable for years. I don't know if they are now.
It's not the speed that kills you, it's the sudden stop.
Multiply the existing number of Mullen shares times the share price when it went public. You get a ridiculous 11 digit number
As a guy who works for Rite Aid. This is very disconcerting.
Nursing Centers . 1. St. James Nursing Center. 2.Father Murrays Villa Nursing Center
Solana - up 65% - possible to $950 in 2025, according to analysts 👍
Don't show mr wonderful in a finance video as a supporting voice for context. It undercuts the validity of the video.
I was expecting a list of zombie firms
Hard to take any documentary seriously when they start with a clip of Kevin O'Leary, the same guy who lied about fully investigating that FTX was a legitimate business, and that SBF was totally trustworthy because of his parents.
GM, Ford, just about any US car company; telecoms; train freight companies; and agricultural firms.
I would bet you anything that all of those executives at yellow got a big fat paycheck right before they shut down and laid all those people off. That’s the problem with bailouts, there’s never any follow-through.
Aging population and young generation that are not motivated can be a factor. People need to be inspired just as in the 1960's
OK boomer 😂
I misread that as zombie films
Gotta cut the cord. The longer you try to put off the pain, the more pain there will be.
Alan Greenspan called it “creative destruction”. Example of Telegraph, and rail roads had to be left behind as telephone, and gas cars with interstates replaced them. Call them zombies, but Really it’s companies that have to change to maintain existence, thus creative part, unfortunately it simultaneously destructs the old...
Private Equity is the rot in America's core
Zombie companies were created by Feds money printer. What happened to Cathie Wood of ARKK etf???
7:55 - Lotfi Karoui, "Chief Credit Strategist" at Goldman Sachs, based upon what he says here, is exactly the kind of person responsible, along with many others, for the crash that is looming on the horizon. These people never learn from precious disasters, no matter how many times they happen, and they are never punished appropriately for their recklessness and stupidity. Goldman Sachs should no longer exist, nor should any other companies responsible for previous crashes. They shouldn't get bailed out with taxpayer money while working class people are left to fend for themselves.
So how can a Bank continue to lend money when they are not being paid back???😂
There's a saying in banking "no bad loans are underwritten." It's hopeful thinking for a quick buck
because the government is printing money and giving it to them
Money printer go BRrrrrrRrrrrrRrrrRrr
If we are coining the term zombie firms, what are we gonna call banks - the lich king?
Ok while I understand low growth, less profitable firms lose to larger, more profitable ones, I’m thinking we also need a diverse supply chain. We need more, not fewer firms in the marketplace. Also, many mid-size, low growth firms could be consolidated and leverage economies of scale of various parts of the business to gain profitability and reignite growth. So, instead of just killing the firms, why not consolidate?
According to market theory, in the long term there will always only be a hand full of firms operating in each industry at or near zero profit
Consolidation happens only if the company being bought is worthwhile for the buyer, if it's a crap company (bad product, bad assets etc) then it should go bust.
But all their employees were paid? Who lost money? My business was a loss for four years in a row. Mostly due to the loans. Downsized and paid off loans. Now we're in profits.