I’ve been wondering for a long time how a company like WIN can buy another company with stock when they owe more than the stock is worth? It would be like me buying my neighbors house with my houses equity when i owe the bank more money than my house would sell for? And still keep my house too!
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Excellent explanation, thank you. The citi analyst seemed to just cut though all of the “how can Wall Street still make money speculating on this stock” bullish-t and just blurted out an honest analysis much like you did (gasp!). Makes much more sense now
ELink was a merger with stock to stock so you just need both parties to agree and done. Minimum capital required. The other recent M&A were from capital from junk bonds and from Windstream selling it's remaining stock in Uniti. ELink debt assumed was converted to WS bonds via swap and reissue and here we are. The current debt load is mostly the capital from all M&A all the way back to nuvox... Windstream just keeps kicking the can down the road. Some of the debt was spun off with CS&L now Uniti (see current lawsuit...) But alot of the debt remains. The problem is when people don't want to buy your bonds any more and you have to take desperate high yield (see last week's bond offerings...) It doesn't look good in any light and even the lowest level analyst on wall Street knows this.
It has something to do with "invisible hand of the free market". Somehow this is all benefiting someone.
I can't find any written evidence on how these buyouts were funded but I'm thinking leveraged buyout
If people with capital are still willing to buy your junk bonds you can do whatever the hell you want to. That's capitalism, God love it. However.. when they stop buying them, when they stop exchanging them... Then you are in the $hit.
Yes , and also windstream bankers, please post your contact info, I know a lot of people who would like to get loans through you