Company Debt – HHQH http://hhqh.net/ Fri, 13 May 2022 22:04:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://hhqh.net/wp-content/uploads/2021/07/icon-2-150x150.png Company Debt – HHQH http://hhqh.net/ 32 32 ‘Yellowstone’ producer David Glasser sued over personal loan https://hhqh.net/yellowstone-producer-david-glasser-sued-over-personal-loan/ Fri, 13 May 2022 20:40:00 +0000 https://hhqh.net/yellowstone-producer-david-glasser-sued-over-personal-loan/ A film investor has sued former Weinstein Co. executive David Glasser, now CEO of “Yellowstone” producer 101 Studios, alleging he failed to repay a personal loan despite repeated assurances. Glasser is best known as producer of the hit Paramount Network drama series “Yellowstone,” starring Kevin Costner, and its spinoff. In 2009, he was head of […]]]>

A film investor has sued former Weinstein Co. executive David Glasser, now CEO of “Yellowstone” producer 101 Studios, alleging he failed to repay a personal loan despite repeated assurances.

Glasser is best known as producer of the hit Paramount Network drama series “Yellowstone,” starring Kevin Costner, and its spinoff. In 2009, he was head of international sales at Weinstein Co., when, according to the lawsuit, he persuaded Radenko Milakovic to loan him $531,288.

Milakovic was an investor in the Weinstein Co. movie “Escape From Planet Earth” and also invested in a project called “90 Days.” According to public records, he is an officer at Altima Partners LLP, UK, and resides in Portugal.

According to his complaint, Milakovic initially rejected Glasser’s loan request, fearing it would complicate his relationship with the studio. But, according to the lawsuit, Glasser insisted he needed the funds to prevent the foreclosure of his parents’ home.

Milakovic began to fear that if he refused the loan, Glasser could jeopardize his relationship with the company, according to the lawsuit.

“Plaintiff and his team had observed that Defendant Glasser often created conflict and chaos only to then step in to ‘fix’ it, when it suited him,” the lawsuit states. “The relationship with TWC had become increasingly difficult, so Plaintiff felt he had to protect this business investment. Based on Defendant Glasser’s past conduct, and his position and authority at TWC , the plaintiff became increasingly concerned that the defendant Glasser could and could make things even more difficult.”

Milakovic said in the lawsuit that he felt he had “no choice” but to make the loan. According to the complaint, the loan was to be repaid in six months, but that did not happen. Instead, Milakovic alleges that Glasser has only made sporadic payments and hasn’t paid anything since 2016. The current balance, according to the complaint, is $908,563.

Glasser’s attorney, Jeffrey Gersh, said the lawsuit had “no merit.”

“This is a 13-year-old debt,” Gersh said. “They made up allegations to try and force David to pay money he doesn’t owe, at a time in his life when he’s on top of the world right now. They come out of the carpentry to bring these claims that have no basis.

Glasser was chief operating officer of Weinstein Co. in 2017, when the company collapsed following the Harvey Weinstein sexual assault scandal. Glasser was briefly in line to take over the company under a new ownership group, but that deal fell apart, Glasser was fired, and Weinstein Co. was liquidated into bankruptcy.

Glasser launched 101 Studios with backing from Ron Burkle in 2019.

The lawsuit alleges Glasser met Milakovic for a dinner party in Miami in November 2018 and tried to persuade him to invest in the new company. Milakovic refused unless the outstanding loan was paid off first, he alleges. According to the lawsuit, Glasser orally agreed to pay $161,288 in cash and transfer a 2.32% stake in 101 Studios, in order to satisfy the obligations. However, Glasser never followed up, according to the suit.

Later, Milakovic claims that Glasser was able to refinance his personal debts with a loan of at least $5 million from an accredited financial institution. However, Milakovic alleges that he never received a refund. The complaint states that Glasser “instead chose to live a lavish lifestyle, which included vacation homes, world travel and luxury cars.”

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Is Everyman Media Group (LON:EMAN) weighed down by its debt? https://hhqh.net/is-everyman-media-group-loneman-weighed-down-by-its-debt/ Thu, 12 May 2022 05:11:31 +0000 https://hhqh.net/is-everyman-media-group-loneman-weighed-down-by-its-debt/ Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. We note that Everyman Media […]]]>

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. We note that Everyman Media Group plc (LON:EMAN) has debt on its balance sheet. But the real question is whether this debt makes the business risky.

What risk does debt carry?

Debt helps a business until the business struggles to pay it back, either with new capital or with free cash flow. In the worst case, a company can go bankrupt if it cannot pay its creditors. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. By replacing dilution, however, debt can be a great tool for companies that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business has is to look at its cash flow and debt together.

Check out our latest analysis for Everyman Media Group

What is Everyman Media Group’s net debt?

You can click on the graph below for historical figures, but it shows that in December 2021, Everyman Media Group had debt of £12.6m, up from £9.04m sterling, over one year. However, as he has a cash reserve of £4.24m, his net debt is lower at around £8.38m.

AIM:EMAN Debt to Equity History May 12, 2022

A Look at Everyman Media Group’s Responsibilities

The latest balance sheet data shows Everyman Media Group had liabilities of £19.1million due within a year, and liabilities of £92.8million falling due thereafter. On the other hand, it had cash of £4.24 million and £5.65 million of receivables due within the year. Thus, its liabilities total £102.0 million more than the combination of its cash and short-term receivables.

This deficit is considerable compared to its market capitalization of £106.7 million, so he suggests that shareholders monitor the use of debt by Everyman Media Group. If its lenders asked it to shore up its balance sheet, shareholders would likely face significant dilution. When analyzing debt levels, the balance sheet is the obvious starting point. But it is future earnings, more than anything, that will determine Everyman Media Group’s ability to maintain a healthy balance sheet in the future. So if you want to see what the professionals think, you might find this free analyst earnings forecast report interesting.

Last year, Everyman Media Group was not profitable on an EBIT level, but managed to increase its turnover by 101%, to £49 million. There is therefore no doubt that shareholders encourage growth

Caveat Emptor

While we can certainly appreciate Everyman Media Group’s revenue growth, its earnings before interest and tax (EBIT) loss is less than ideal. Indeed, it lost £8.5 million in EBIT. When we look at this and recall the liabilities on its balance sheet, versus cash, it seems unwise to us that the company has liabilities. Quite frankly, we think the track record falls short, although it could improve over time. We’d feel better if he turned his £5.4m year-over-year loss into a profit. So, to be frank, we think it’s risky. When analyzing debt levels, the balance sheet is the obvious starting point. However, not all investment risks reside on the balance sheet, far from it. Be aware that Everyman Media Group shows 1 warning sign in our investment analysis you should know…

If you are interested in investing in businesses that can generate profits without the burden of debt, then check out this free list of growing companies that have net cash on the balance sheet.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Dynavax Technologies (NASDAQ:DVAX) could easily take on more debt https://hhqh.net/dynavax-technologies-nasdaqdvax-could-easily-take-on-more-debt/ Tue, 10 May 2022 14:34:09 +0000 https://hhqh.net/dynavax-technologies-nasdaqdvax-could-easily-take-on-more-debt/ Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. We can see that […]]]>

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. We can see that Company Dynavax Technologies (NASDAQ:DVAX) uses debt in its business. But the real question is whether this debt makes the business risky.

When is debt dangerous?

Generally speaking, debt only becomes a real problem when a company cannot easily repay it, either by raising capital or with its own cash flow. If things go really bad, lenders can take over the business. However, a more frequent (but still costly) event is when a company has to issue shares at bargain prices, permanently diluting shareholders, just to shore up its balance sheet. By replacing dilution, however, debt can be a great tool for companies that need capital to invest in growth at high rates of return. The first step when considering a company’s debt levels is to consider its cash and debt together.

See our latest analysis for Dynavax Technologies

What is Dynavax Technologies’ debt?

The image below, which you can click on for more details, shows that in March 2022, Dynavax Technologies had $220.8 million in debt, up from $179.9 million in one year. However, he has $503.2 million in cash to offset that, which translates to a net cash of $282.5 million.

NasdaqCM: Historical Debt to Equity DVAX May 10, 2022

How healthy is Dynavax Technologies’ balance sheet?

The latest balance sheet data shows that Dynavax Technologies had liabilities of $466.2 million due within the year, and liabilities of $255.3 million due thereafter. In return, he had $503.2 million in cash and $207.8 million in receivables due within 12 months. Thus, its total liabilities match its short-term liquid assets almost perfectly.

Given the size of Dynavax Technologies, it appears that its cash is well balanced with its total liabilities. So while it’s hard to imagine the US$1.13 billion company struggling for cash, we still think it’s worth keeping an eye on its balance sheet. While it has liabilities worth noting, Dynavax Technologies also has more cash than debt, so we’re pretty confident it can manage its debt safely.

It was also good to see that despite losing money on the EBIT line last year, Dynavax Technologies turned things around over the last 12 months, delivering an EBIT of US$144 million. The balance sheet is clearly the area to focus on when analyzing debt. But it is future earnings, more than anything, that will determine Dynavax Technologies’ ability to maintain a healthy balance sheet in the future. So if you are focused on the future, you can check out this free report showing analyst earnings forecast.

But our last consideration is also important, because a company cannot pay debt with paper profits; he needs cash. Dynavax Technologies may have net cash on the balance sheet, but it is always interesting to see how well the company converts its earnings before interest and taxes (EBIT) into free cash flow, as this will influence both its need and its capacity. to manage debt. Fortunately for all shareholders, Dynavax Technologies has actually produced more free cash flow than EBIT over the past year. This kind of high cash conversion gets us as excited as the crowd when the beat drops at a Daft Punk concert.

Summary

While it’s always a good idea to look at a company’s total liabilities, it’s very reassuring that Dynavax Technologies has $282.5 million in net cash. And it impressed us with free cash flow of $238 million, or 165% of its EBIT. So is Dynavax Technologies’ debt a risk? This does not seem to us to be the case. The balance sheet is clearly the area to focus on when analyzing debt. But at the end of the day, every business can contain risks that exist outside of the balance sheet. We have identified 4 warning signs with Dynavax Technologies (at least 1 which is concerning), and understanding them should be part of your investment process.

In the end, sometimes it’s easier to focus on companies that don’t even need to take on debt. Readers can access a list of growth stocks with no net debt 100% freeright now.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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The judge must decide – Can non-payment of a court-ordered debt lead to a contempt trial? https://hhqh.net/the-judge-must-decide-can-non-payment-of-a-court-ordered-debt-lead-to-a-contempt-trial/ Sun, 08 May 2022 18:14:56 +0000 https://hhqh.net/the-judge-must-decide-can-non-payment-of-a-court-ordered-debt-lead-to-a-contempt-trial/ News Ken Chee Hing 4 hours ago Judge Frank Seepersad – A High Court judge will rule in July on whether civil procedure rules allow a motion for contempt of court for non-payment of a judgment debt. The judge was asked to consider the issue in a land case in which a real estate company […]]]>

News



Judge Frank Seepersad –

A High Court judge will rule in July on whether civil procedure rules allow a motion for contempt of court for non-payment of a judgment debt.

The judge was asked to consider the issue in a land case in which a real estate company and a lawyer failed to honor an agreement to honor a $3.5 million debt.

The money was due for the sale of lots of land in 2014.

In 2020, a High Court judge ruled on the landowner’s estate, saying there was evidence the property company had received money from the sale.

The case was brought by lawyers for an 85-year-old man who is the executor of his late son-in-law’s estate.

The 85-year-old’s family have asked that his father’s name be kept confidential over fears he could be targeted by criminals due to the large sum of money owed to him and the rampant crime rate in TT.

The contempt claim was filed against DBM Real Estate Services, DBM Holdings and attorney Ronald Boynes.

Although an agreement was reached on payment, the real estate company and the lawyer defaulted, leading to the contempt of court claim.

At a hearing on Thursday, Judge Frank Seepersad questioned whether the rules of civil procedure provide for a contempt of court action for non-payment of a debt incurred after a court order.

He said there were a myriad of enforcement procedures that could apply, and contempt generally only applies when a party breaches a court order to do something or to restrain something. .

In response to the request, attorney Christlyn Moore, who represents the companies and Boynes, agreed.

“I felt there was a range of enforcement options that were available,” she said, adding that while contempt of court applied in this case, the procedure for make the request had not been followed.

“Even the most basic hurdle of contempt has not been cleared,” Moore said.

Seepersad asked for comments on the matter and said it would issue its decision on July 27.

The judge also asked Moore where his clients stand on debt enforcement, as “court orders should not be dismissed or ignored.

“The rule of law depends on the parties respecting court orders,” he added.

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Is Plastiblends India (NSE:PLASTIBLEN) using too much debt? https://hhqh.net/is-plastiblends-india-nseplastiblen-using-too-much-debt/ Sat, 07 May 2022 02:42:21 +0000 https://hhqh.net/is-plastiblends-india-nseplastiblen-using-too-much-debt/ Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. […]]]>

Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. Above all, Plastiblends India Limited (NSE:PLASTIBLEN) is in debt. But the real question is whether this debt makes the business risky.

When is debt a problem?

Debt helps a business until the business struggles to pay it back, either with new capital or with free cash flow. If things go really bad, lenders can take over the business. However, a more common (but still painful) scenario is that it has to raise new equity at a low price, thereby permanently diluting shareholders. Of course, many companies use debt to finance their growth, without any negative consequences. The first thing to do when considering how much debt a business has is to look at its cash flow and debt together.

Check out our latest analysis for Plastiblends India

What is Plastiblends India’s debt?

The graph below, which you can click on for more details, shows that Plastiblends India had a debt of ₹326.8 million in March 2022; about the same as the previous year. However, he has ₹78.0 million of cash to offset this, resulting in a net debt of around ₹248.9 million.

NSEI:PLASTIBLEN Debt to Equity History May 7, 2022

How healthy is Plastiblends India’s balance sheet?

We can see from the most recent balance sheet that Plastiblends India had liabilities of ₹919.3m due within a year, and liabilities of ₹440.0m due beyond. As compensation for these obligations, it had cash of ₹78.0 million as well as receivables valued at ₹1.20 billion due within 12 months. Thus, its liabilities outweigh the sum of its cash and (short-term) receivables of ₹85.3 million.

This situation indicates that Plastiblends India’s balance sheet looks quite strong, as its total liabilities roughly equal its liquid assets. It is therefore highly unlikely that the ₹5.35bn company will run out of cash, but it is still worth keeping an eye on the balance sheet.

We measure a company’s leverage against its earning power by looking at its net debt divided by its earnings before interest, taxes, depreciation and amortization (EBITDA) and calculating how easily its earnings before interest and taxes (EBIT ) covers its interest charge (interest coverage). Thus, we consider debt to earnings with and without amortization and depreciation expense.

Plastiblends India has a low net debt to EBITDA ratio of just 0.37. And its EBIT easily covers its interest charges, which is 16.8 times the size. So we’re pretty relaxed about his super-conservative use of debt. In contrast, Plastiblends India has seen its EBIT fall by 2.1% over the last twelve months. If earnings continue to decline at this rate, the company could find it increasingly difficult to manage its debt. There is no doubt that we learn the most about debt from the balance sheet. But you can’t look at debt in total isolation; since Plastiblends India will need revenue to repay this debt. So, if you want to know more about its earnings, it may be worth checking out this graph of its long-term trend.

But our last consideration is also important, because a company cannot pay debt with paper profits; he needs cash. We therefore always check how much of this EBIT is converted into free cash flow. Over the past three years, Plastiblends India has recorded free cash flow of 58% of its EBIT, which is about normal given that free cash flow excludes interest and taxes. This free cash flow puts the company in a good position to repay its debt, should it arise.

Our point of view

Fortunately, Plastiblends India’s impressive interest coverage means it has the upper hand on its debt. But truth be told, we think its EBIT growth rate somewhat undermines that impression. When we consider the range of factors above, it seems that Plastiblends India is quite sensitive with its use of debt. While this carries some risk, it can also improve shareholder returns. There is no doubt that we learn the most about debt from the balance sheet. However, not all investment risks reside on the balance sheet, far from it. Example: we have identified 2 warning signs for Plastiblends India you should be aware.

If, after all that, you’re more interested in a fast-growing company with a strong balance sheet, check out our list of cash-neutral growth stocks right away.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Varroc Engineering seeks to sell its lighting business and pay off its debt https://hhqh.net/varroc-engineering-seeks-to-sell-its-lighting-business-and-pay-off-its-debt/ Tue, 03 May 2022 09:40:20 +0000 https://hhqh.net/varroc-engineering-seeks-to-sell-its-lighting-business-and-pay-off-its-debt/ Auto parts maker Varroc Engineering will fully pay off its debt if it manages to sell a large part of its lighting business. The Aurangabad-based company, headed by Tarang Jain, has signed an agreement with French company Compagnie Plastic Omnium SE to sell its lighting business in the Americas and Europe for 600 million euros. […]]]>

Auto parts maker Varroc Engineering will fully pay off its debt if it manages to sell a large part of its lighting business.

The Aurangabad-based company, headed by Tarang Jain, has signed an agreement with French company Compagnie Plastic Omnium SE to sell its lighting business in the Americas and Europe for 600 million euros. Lighting activities in India and China are not part of the agreement.

At the end of FY22, Varroc Engineering had a consolidated debt of ₹2,500 crore.

“The net equity value that Varroc will get after repaying all the debt (in Varroc Lighting Systems) will be 160-175 million euros. We will use part of it to partially repay some of the high cost debt in India that we had incurred for VLS purposes abroad. We could use the balance for a dividend or other purposes,” Jain said. Activity area.

Pandemic disruption

Two years of the Covid-19 pandemic followed by supply chain disruption caused by semiconductor shortages had hit Varroc’s lighting business. Its underutilized factories have become a drag on its balance sheet.

Prior to the pandemic, the company had a 4% market share in the global lighting segment, including 20% ​​in the global electric vehicle lighting business. It aimed to become one of the top three lighting manufacturers in the world.

“The lighting business in India and the joint venture in China will continue with us. We will still be in the lighting business but more in the Asian context. Sometimes circumstances call for a business decision. you make such calls,” Jain said.

Jain said the company doesn’t see the chip shortage ending until 2023. “With debt mounting, it was difficult for us to continue,” he said, adding that they decided in September last to bring in strategic players.

Varroc will also review certain non-core areas of its business with a view to divestment. After the deal, 85% of its revenue will have to come from India.

“We have a forge plant in Europe. We haven’t decided yet, but in the future there might be a divestment there or maybe some of the metal business in India, which is not the two-wheeler business. We want to focus more on profitable and core business,” added Jain.

Published on

May 03, 2022

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Debt can be a killer https://hhqh.net/debt-can-be-a-killer/ Sun, 01 May 2022 17:36:00 +0000 https://hhqh.net/debt-can-be-a-killer/ The arrest last week of the founder of investment firm Archegos on charges of securities fraud is a stark reminder of the hidden debt. In March 2021, Archegos was overleveraged, allegedly hiding its debt from Wall Street firms as it used funky “total return swaps” to manipulate stock prices. The inevitable collapse destroyed $100 billion […]]]>

The arrest last week of the founder of investment firm Archegos on charges of securities fraud is a stark reminder of the hidden debt. In March 2021, Archegos was overleveraged, allegedly hiding its debt from Wall Street firms as it used funky “total return swaps” to manipulate stock prices. The inevitable collapse destroyed $100 billion in stock market value. (Archegos’ lawyers have denied the allegations.) Separately, supply chain financier Greensill used what Fitch described as a “hidden debt loophole” and collapsed around the same time. moment.

Are there more there? I ask because we are in the most dangerous part of the economic cycle. Interest rates are rising to fight inflation, and there could be all kinds of levers that we don’t know about. There always are. A slowdown (and especially a recession) would reveal these hidden horrors. In 2018, this column claimed that “in a downturn, equity hurts but debt kills.” We’re about to find out if that’s still true.

Over $850 billion in credit card debt and $800 billion in margin debt are high but below their peaks, and at least those are known amounts. It’s always a hidden debt that comes back to bite when things fall apart. In June 1929, banks had $82 in deposits for every dollar in cash on hand. Bank runs followed. The 2008-09 financial crisis resulted from mispriced secured loans and bizarre derivatives on the balance sheets of Lehman Brothers, Bear Stearns and many others. Citibank used “structured investment vehicles” laden with mortgages and who knows what else to essentially hide $100 billion in debt by keeping it off its balance sheet.

Today, debt is back in fashion. You’re hereit is

The latest proxy statement shows Elon Musk holds 73 million options and 170 million shares, of which more than 88 million have been “pledged to secure certain personal debts”. Even assuming a loan-to-value ratio of 20%, that’s a lot of personal debt. As part of the ongoing Twitter deal, Morgan Stanley is providing a $12.5 billion margin loan for an additional $62 million of its Tesla shares.

Tesla sold about one million cars in 2021 and was worth $1 trillion last week at the time of the Twitter deal. Ford engine Co.

sold nearly two million vehicles in 2021 and is currently worth just under $60 billion. I’d rather have Tesla’s stuff than Ford’s, but maybe Tesla’s assessment is a little fluffy. Netflix shares have fallen 72% in six months. Carvana is down 84% since August. Valuations are fleeting and we are not even in a recession. Now may not be the time to borrow against Tesla stock.

There are reports that Mr. Musk could take out a loan against his current 9.2% stake in Twitter. Yes, borrow against Twitter to buy more Twitter. Why does this sound familiar to you? Oh yes, MicroStrategy.

Michael Saylor, a bitcoin evangelist and CEO of Virginia-based software company Tysons, called on the company to buy quantities of the cryptocurrency. He recently took out a $205 million loan, secured by his bitcoin holdings, to buy even more bitcoins, for a current total of 128,687 worth $5 billion. In March, Saylor tweeted: “Give me a long enough lever and #bitcoin to put it on, and I’ll move the world. It does not say in which direction. Note that Microstrategy’s enterprise value is worth less than its bitcoin.

The latest crypto craze is decentralized finance, the ability to transact between peers, bypassing centralized banks, Wall Street and governments. YouTube is filled with videos with titles like “Use the Power of DeFi to Leverage Any Asset.” There is even a lending and borrowing platform named DeFi Prime. Sounds safe, but buying condos in Las Vegas with leverage in 2007 does too.

A DeFi effort named Terra is surprisingly offering 20% ​​returns on deposits to fund a blockchain platform that uses an “algorithmic stablecoin” that maintains a price of $1. To do this, there is a fluctuating (but backed by nothing) cryptocurrency named Luna which is created or destroyed to buy or sell the TerraUSD stablecoin as needed to keep it stable. More than 20 years ago, Enron created and issued stock to cover the losses of heavily indebted special purpose vehicles until the losses became so large that the plan collapsed. Terra CEO Do Kwon told Bloomberg that high deposit yields are not a problem; they resemble the high commercial bank rates in many Asian countries in the 1990s. Someone could remind him how it ended: with bad debts and giant currency crises in 1997 and 1998.

How much debt is there in the crypto world? Nobody really knows, but I wouldn’t want to be in his path if it started to snowball during a downturn.

Even scarier is the $13.4 trillion in debt owed by non-US borrowers, according to the Bank for International Settlements. It’s doubled since 2010. It may be overstated because of hedging, but that’s a lot of dollar-denominated debt. Every time the Federal Reserve raises interest rates to fight inflation, the dollar strengthens against other currencies, making servicing dollar debt more expensive. Will this all explode? I’ve seen it happen a few times. Debt kills every time.

Write to kessler@wsj.com.

Summary and outlook: Buying Twitter for $44 billion is a gamble that could shatter Silicon Valley’s progressive compliance culture. Images: Reuters/Getty Images/Billboard Composed by: Mark Kelly

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

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InnoCare Pharma (HKG:9969) uses debt safely https://hhqh.net/innocare-pharma-hkg9969-uses-debt-safely/ Sat, 30 Apr 2022 00:43:30 +0000 https://hhqh.net/innocare-pharma-hkg9969-uses-debt-safely/ David Iben said it well when he said: “Volatility is not a risk that interests us. What matters to us is to avoid the permanent loss of capital. So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing a company’s risk. […]]]>

David Iben said it well when he said: “Volatility is not a risk that interests us. What matters to us is to avoid the permanent loss of capital. So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing a company’s risk. We can see that InnoCare Pharma Limited (HKG:9969) uses debt in his business. But the real question is whether this debt makes the business risky.

When is debt a problem?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. If things go really bad, lenders can take over the business. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. Of course, the advantage of debt is that it often represents cheap capital, especially when it replaces dilution in a business with the ability to reinvest at high rates of return. The first thing to do when considering how much debt a business has is to look at its cash flow and debt together.

See our latest analysis for InnoCare Pharma

What is InnoCare Pharma’s debt?

The image below, which you can click on for more details, shows that in December 2021, InnoCare Pharma had a debt of 1.24 billion Canadian yen, compared to 1.15 billion national yen in one year. But on the other hand, it also has 6.25 billion Canadian yen in cash, resulting in a net cash position of 5.01 billion domestic yen.

SEHK: 9969 Debt to Equity History as of April 30, 2022

A look at InnoCare Pharma’s responsibilities

The latest balance sheet data shows that InnoCare Pharma had liabilities of 329.3 million yen maturing within one year, and liabilities of 1.41 billion yen maturing thereafter. On the other hand, it had a cash position of 6.25 billion Canadian yen and 107.5 million national yen in receivables due within the year. He can therefore boast of having 4.61 billion yen more in liquid assets than total Passives.

This surplus suggests that InnoCare Pharma is using debt in a way that seems both safe and conservative. Because he has a lot of assets, he is unlikely to have any problems with his lenders. In summary, InnoCare Pharma has a net cash position, so it’s fair to say that it doesn’t have a lot of debt! The balance sheet is clearly the area to focus on when analyzing debt. But ultimately, the company’s future profitability will decide whether InnoCare Pharma can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free analyst earnings forecast report interesting.

Last year, InnoCare Pharma was not profitable in terms of EBIT, but managed to increase its turnover by 76,369%, to 1.0 billion yen. That’s practically the hole-in-one of revenue growth!

So how risky is InnoCare Pharma?

We have no doubt that loss-making companies are, in general, more risky than profitable companies. And the fact is that over the past twelve months, InnoCare Pharma has been losing money in earnings before interest and taxes (EBIT). Indeed, during this period, he burned 11,000 yen of cash and suffered a loss of 65 million yen. While this makes the company a bit risky, it’s important to remember that it has a net cash position of 5.01 billion Canadian yen. That means it could continue spending at its current rate for more than two years. The good news for shareholders is that InnoCare Pharma has skyrocketing revenue growth, so there is a very good chance that it can increase its free cash flow in the years to come. While unprofitable businesses can be risky, they can also grow strongly and quickly in those pre-profit years. There is no doubt that we learn the most about debt from the balance sheet. But at the end of the day, every business can contain risks that exist outside of the balance sheet. These risks can be difficult to spot. Every business has them, and we’ve spotted 2 warning signs for InnoCare Pharma you should know.

In the end, sometimes it’s easier to focus on companies that don’t even need to take on debt. Readers can access a list of growth stocks with no net debt 100% freeright now.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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A. Libental Holdings (TLV:LBTL) has debt but no revenue; Should you be worried? https://hhqh.net/a-libental-holdings-tlvlbtl-has-debt-but-no-revenue-should-you-be-worried/ Thu, 28 Apr 2022 10:35:04 +0000 https://hhqh.net/a-libental-holdings-tlvlbtl-has-debt-but-no-revenue-should-you-be-worried/ Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. Like many other companies A.Libental […]]]>

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. Like many other companies A.Libental Holdings Ltd. (TLV:LBTL) uses debt. But should shareholders worry about its use of debt?

When is debt a problem?

Generally speaking, debt only becomes a real problem when a company cannot easily repay it, either by raising capital or with its own cash flow. An integral part of capitalism is the process of “creative destruction” where bankrupt companies are mercilessly liquidated by their bankers. However, a more common (but still painful) scenario is that it has to raise new equity at a low price, thereby permanently diluting shareholders. Of course, many companies use debt to finance their growth, without any negative consequences. When we look at debt levels, we first consider cash and debt levels, together.

See our latest analysis for A. Libental Holdings

What is the net debt of A. Liberal Holdings?

The image below, which you can click on for more details, shows that as of December 2021, A. Libental Holdings had a debt of ₪252.2 million, up from ₪156.4 million in one year. However, he has ₪65.1 million in cash to offset this, resulting in a net debt of around ₪187.2 million.

TASE: LBTL Debt to Equity April 28, 2022

How strong is A. Libental Holdings’ balance sheet?

Zooming in on the latest balance sheet data, we can see that A. Libental Holdings had liabilities of ₪172.6 million due within 12 months and liabilities of ₪146.9 million due beyond. As compensation for these obligations, it had cash of ₪65.1 million as well as receivables valued at ₪27.6 million due within 12 months. It therefore has liabilities totaling £226.9 million more than its cash and short-term receivables, combined.

Given that this deficit is actually larger than the company’s market capitalization of £156.7m, we think shareholders should really be keeping an eye on A’s debt levels. Libental Holdings, like a parent watching their child ride a bike for the first time. In theory, extremely large dilution would be required if the company were forced to repay its debts by raising capital at the current share price. There is no doubt that we learn the most about debt from the balance sheet. But these are the benefits of A. Libental Holdings that will influence balance sheet performance in the future. So, when considering debt, it is definitely worth looking at the earnings trend. Click here for an interactive preview.

It seems likely that shareholders will be hoping that A. Libental Holdings can advance the business plan significantly before too long, as it has no significant revenue at the moment.

Caveat Emptor

Importantly, A. Libental Holdings posted a loss in earnings before interest and taxes (EBIT) over the past year. Indeed, it lost ₪5.5 million in EBIT. Considering that alongside the liabilities mentioned above, we are nervous about the business. It would have to quickly improve its functioning so that we are interested in it. Not least because it recorded negative free cash flow of ₪18 million in the last twelve months. So suffice it to say that we consider the stock to be risky. The balance sheet is clearly the area to focus on when analyzing debt. But at the end of the day, every business can contain risks that exist outside of the balance sheet. For example, we have identified 3 warning signs for A. Libental Holdings (1 is a little worrying) you should be aware.

Of course, if you’re the type of investor who prefers to buy stocks without the burden of debt, then feel free to check out our exclusive list of cash-efficient growth stocks today.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Debt relief for defrauded students is long overdue – and so is Kaplan’s liability https://hhqh.net/debt-relief-for-defrauded-students-is-long-overdue-and-so-is-kaplans-liability/ Tue, 26 Apr 2022 16:02:01 +0000 https://hhqh.net/debt-relief-for-defrauded-students-is-long-overdue-and-so-is-kaplans-liability/ Lawyers representing former Kaplan Career Institute students in Massachusetts have sued the U.S. Department of Education, alleging an unlawful and unconscionable failure by the Department to cancel federal student loans — six years after the Massachusetts attorney general ruled settled with the school on charges that he cheated and defrauded students. After the Massachusetts AG […]]]>

Lawyers representing former Kaplan Career Institute students in Massachusetts have sued the U.S. Department of Education, alleging an unlawful and unconscionable failure by the Department to cancel federal student loans — six years after the Massachusetts attorney general ruled settled with the school on charges that he cheated and defrauded students. After the Massachusetts AG office reached its $1.375 million settlement with the Kaplan Career Institute, it asked the Department for a “group release” on behalf of the students, alleging they had been harmed by systematic deception and deserved to have their loan debt forgiven. by each last participant.

The Department is expected to move quickly to cancel the loans in response to the lawsuit, which was filed by three nonprofit law firms: Student Defense, Project on Predatory Student Lending and National Consumer Law Center. Ex-students have wasted enough time and money to earn Kaplan degrees that for many have yielded no career advancement.

But there is more the ministry should be doing. The company that the Massachusetts AG found was defrauding students — and whose loan dumps would cost taxpayers millions — is not a mall scam operation. It’s a big company, listed on Wall Street, called Graham Holdings, whose president is Donald Graham, a powerful Washingtonian from a legendary Washington family. Legendary because the company was once called The Washington Post Company before selling its flagship newspaper to Jeff Bezos. Unfortunately, under Donald Graham, society shifted its focus from journalism to educational testing and then to running predatory universities that took billions of taxpayer dollars for student aid and ruined the financial future of many people they had promised to help.

Worse, the fact that the struggling brands Kaplan Career Institute, Kaplan College and Kaplan University – tainted by multiple law enforcement, congressional and media investigations exposing deceptive and predatory practices – are gone does not mean that Kaplan Higher Education and Graham Holdings left higher education. Instead, taking advantage of the lax regulatory environment under Donald Trump and Betsy DeVos, Graham Holdings engineered a troubling deal with former Indiana governor and current Purdue University president Mitch Daniels to dress the Kaplan University with a new name – Purdue University Global – and the respectable brilliance and protections of a state university, while allowing the company to hold a lucrative 30-year contract to continue running the school .

So taxpayers continue to send tens of millions of dollars each year to a school run by the same predatory Graham Holdings/Kaplan operation, and the men and women who seek to improve their financial futures through education – alumni fighters, single mothers, recent immigrants and others – continue to enroll, when they could get a much better and more affordable education elsewhere.

So even if the Department of Education does the right thing here in response to the retrial and provides debt relief to those defrauded by Kaplan, it needs to stop compounding its mistake of sending money. to Kaplan through Purdue Global. He should take a close look at the company and the school and recognize that they have lost the privilege of participating in the federal student aid program.

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