iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
22,284 Blog Posts

CAPITAL MARKETS ARE CLOSED: DEBT = DEATH

With rates jacked to the roof and stock values collapsing, any company with negative free cash flow and large amounts of debt are in serious danger of collapse.  We have a real time tool inside Stocklabs to examine debt/market cap ratios, which I prefer over debt/equity — which I believe to be shit.

This much is known.

Companies enjoyed cheap credit for over a decade and borrowed to the hilt, never bothering to build a FCF positive business because of incompetence. Now with everything unraveling, these companies will either bust or be forced to partake in dilutive PIPE offerings in order to stay afloat, some with very amusing “death spiral” features.

Here are some stocks that hit this screen that are worth sharing.

(Stock/debt-mkt cap ratio/debt)

MSTR 1.37X $2.44B

UONE 2.7X $858M

CMLS 6X $1.16B

RRGB 6X $663M

RXT 2.9X $4B

WE 5.8X $21B

F 2.85X $135B

GM 2.3X $109B

CHTR 1.2X $95B

PCG 1.8X $46B

AAL 5.3X $45B

WBA 1.1X $37B

CCL 3.1X $36B

CZR 3X $26B

TEVA 2.6X $23B

 

The list goes on and on.

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One comment

  1. Orson

    Zombie companies. Force them through conventional bankruptcy.
    Borrowing more debt with the inability to pay current debt is asinine.
    Thanks Keynesian theory.
    What happened to breaking down large companies?

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