Quote:
Originally Posted by redpoint5
Regarding an article sender linked to pages back, which I haven't gotten through yet, a main theme to the article was divesting from petroleum stocks. That struck me as odd, because a company isn't harmed by plummeting stocks; the investors are. The company already profited from the 1-time cash infusion from selling stocks. Once that's done, the risk is borne by the investors.
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I believe that long-term contracts are used as accounts receivable,with respect to commercial loans.If J.P.Morgan Chase or Chemical Bank,for instance,see's your business falling off,and you'd hoped to borrow for capital improvements,or something,the outcome might not turn out so well.It might not be the stock value per se,but associated aspect of your valuation,and ability to repay might be reflected in it.
But I think you're spot on with respect to the IPO.You'll get 80-cents on the dollar after underwriting fees and after that it is all about the shareholders.The flip side though,if you don't control 51% of your stock,it's not your company.