Thread regarding Xerox Corp. layoffs

@fv Filings like this can move the stock as news and as sellers dump stock if the ratting drop was more or less unexpected but any financial investor worth a grain of salt should have seen this coming a mile away.

What is more likely to occur with rating changes and stock prices is when they seem to come out of the blue.. let's say that a defense contractor took out huge loans to build up drones and then we say world peace with a new US administration and cancel all contracts within a 30 day window. This would have seen as huge change in direction over night with very negative results on the defense contractor.

But Xerox isn't in that position.. another possibility is some large investment funds (college endowments, state retirement funds and etc) could have rules against being in stocks below XYZ moody's rating.

I generality believe this down grading by moody's will take the stock down $0.10 if anything and the market will not be able to only point to moody's action for the fall of $0.10; so it's expected news in the market.

@cq wonder if this filing has a direct impact on the stock price? Seems it’s gonna be a horror show. I assume investors will react to this kinda news like when an earnings call is released and therefore the stock will be affected? Any familiarity with this?

It the cash flow no credit, xerox can’t pay cash upfront or did they anticipate this and thus 450 million loan on IP?

Interesting lookup for people whom want to map Moody's scores to there personal finance. So we went from somewhere in the 669-580 to below 580 if we were using FICO.

Which if you think about it is why we had to use a pay day style JV agreement to get some working capital.

While not directly equivalent, the two systems can be categorized similarly in terms of risk:

Highest Quality: Moody's Aaa/Aa -> FICO 800+
Upper Medium: Moody's A -> FICO 740-799 ("Very Good")
Lower Medium: Moody's Baa -> FICO 670-739 ("Good")
Speculative/Risk: Moody's Ba/B -> FICO 580-669 ("Fair")
Default/Subprime: Moody's Caa/C -> FICO <580 ("Poor") 

@cb it’s not so much about setting pricing, it’s more about them just refusing credit and only shipping products if prepaid…. Which we can’t afford to do…. So we won’t be able to supply anything from major brands to our customers. It’s already started happening well before this from Moody. This will just be the next phase of it getting worse.

The big dumper comes on 3/17 when they file their late NT 10K. Look for a write down of +$1BN. If/when that happens the debt will exceed the EV of the company.

I wonder how many top vendors like Microsoft or Dell for example use corporate financial Moddy's ratings to set prices for clients?

Oh dear…. accelerating the end…. Multiple credit insurance companies have already cancelled Xerox credit facilities in Q1 in multiple countries. This will carry on that trend to the point parts of the business can’t trade. And that’s before the disappointing Q1 results are announced.