Two replies for you hotstockerz and both nailed i
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Posted On: 03/05/2019 2:52:43 PM
Two replies for you hotstockerz and both nailed it.
Taking on debt reduces dilution. No additional shares go out the door.
You also want to do it if you could turn that $5-8M into $50-80M faster than your interest rate. Let's say you could turn that $8M into $80M in a year or two. You'd be crazy not to borrow.
If you buy a house, should you pay all cash for it, if you had it or put the money to work for you. Everyone will have a different perspective on that so no right or wrong answer.
A lot of OTC investors see debt as a bad thing because a lot of the OTC stocks take on convertible debt just to stay in business. Companies actually making money and can borrow money the smart way, it's something many consider and do.
Even $50B, $100B, $150B companies take on a lot of debt when it makes sense even when they have a ton of money.
James719:
I believe one reason to take on some debt would be to not have an increase in the A/S. As far as I know it is still 200 million. A forward split of 15 to 1 would increase the authorized shares to over 180 million. So still very few shares for anyone interested. Seems like there will be a need to increase the A/S to, say, 300 million to have shares available for interested parties. My 2 cents for the day. My best to all, Jim Of course, just my very humble opinion.
Read More: https://investorshangout.com/post/newpost/906...z5hKQ1hGfx
Rags2Riches:
Debt financing is capital acquired through the borrowing of funds to be repaid at a later date. Common types of debt are loans and credit. The benefit of debt financing is that it allows a business to leverage a small amount of money into a much larger sum, enabling more rapid growth than might otherwise be possible.In addition, payments on debt are generally tax deductible.
Courtesy of Investopedia
https://www.investopedia.com/ask/answers/0325...ucture.asp
Read More: https://investorshangout.com/post/postreplies...z5hKPd80tR
Taking on debt reduces dilution. No additional shares go out the door.
You also want to do it if you could turn that $5-8M into $50-80M faster than your interest rate. Let's say you could turn that $8M into $80M in a year or two. You'd be crazy not to borrow.
If you buy a house, should you pay all cash for it, if you had it or put the money to work for you. Everyone will have a different perspective on that so no right or wrong answer.
A lot of OTC investors see debt as a bad thing because a lot of the OTC stocks take on convertible debt just to stay in business. Companies actually making money and can borrow money the smart way, it's something many consider and do.
Even $50B, $100B, $150B companies take on a lot of debt when it makes sense even when they have a ton of money.
James719:
I believe one reason to take on some debt would be to not have an increase in the A/S. As far as I know it is still 200 million. A forward split of 15 to 1 would increase the authorized shares to over 180 million. So still very few shares for anyone interested. Seems like there will be a need to increase the A/S to, say, 300 million to have shares available for interested parties. My 2 cents for the day. My best to all, Jim Of course, just my very humble opinion.
Read More: https://investorshangout.com/post/newpost/906...z5hKQ1hGfx
Rags2Riches:
Debt financing is capital acquired through the borrowing of funds to be repaid at a later date. Common types of debt are loans and credit. The benefit of debt financing is that it allows a business to leverage a small amount of money into a much larger sum, enabling more rapid growth than might otherwise be possible.In addition, payments on debt are generally tax deductible.
Courtesy of Investopedia
https://www.investopedia.com/ask/answers/0325...ucture.asp
Read More: https://investorshangout.com/post/postreplies...z5hKPd80tR
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