21–30 of 56 posts
Earlier quoted context omitted.
If you’re profitable and can pay it back, it’s better than equity. If there’s any financial risk then it may not be worth the potential loss of control.
Would depend on the yield on debt vs yield on equity (factoring in earnings growth rate) If your company trades at 100x sales you should probably sell the equity.
Is it me? I feel like we are entering an era where it has become possible for one of the big companies to fail.
Smart to borrow when money is cheap if you think you can do something more profitable with it.
But money has not been cheap for a while now so this is interesting. And yes, if you can do something more profitable with it, borrowing is always smart no, regardless of how cheap it is?
Earlier quoted context omitted.
Financially? Sure. Politically? Not a chance, they'll get bailed out or partially nationalized. Frontier labs will be considered essential to national security, Microsoft is basically a public utility at this point, Facebook is too important for the spread of propaganda (although this one has less of a case/justification for a government bailout), Amazon (via AWS) runs massive parts of the federal gov (along with Azu…
Is Google really a critical dependency for android? I've installed Lineage OS before which worked.
The real impact of Google going dark though is less Android and more ads. Google fails, the revenue pipeline for 2 million + websites goes to zero overnight, and millions of digial businesses and agencies will go bankrupt within weeks. It would completely collapse the business model of the modern internet.
Full title: "Big Tech is borrowing like never before and the Fed just made that a lot more expensive"
I also notice the article is "tagged" as if its title had been split on lowercase 's'es:
> Big tech i
> borrowing like never before and the fed ju
> T made that a lot more expen
This level of attention to detail does not exactly inspire confidence.
NVIDIA raised $25 billion and had $85 billion in orders. Because of the demand, it was able to upsize its offering and issue bonds in maturities ranging from 2 to 30 years at quite favorable interest rates. The amount raised is a quarter of a year's free cash flow and the spread tightened during the book building process, so bond investors obviously aren't on the same page as the author.
You really can't make a bearish argument about the amounts being raised without putting the numbers in perspective. Yes, the issuances are big, but the equity and cashflows are also big, so the amounts being raised in the bond market don't really align to the author's skepticism when it comes to NVIDIA, Google, Meta.
The author would have a stronger case with Oracle but that alone wouldn't support the "Big Tech" story line.
Edit: $25 billion is a quarter's worth of free cash flow for NVIDIA, not half a year's as I originally stated.
Full title: "Big Tech is borrowing like never before and the Fed just made that a lot more expensive"
Which is strange, because they did not in fact implement a big (or any) increase in the federal funds rate. I also notice the article is "tagged" as if its title had been split on lowercase 's'es: > Big tech i > borrowing like never before and the fed ju > T made that a lot more expen This level of attention to detail does not exactly inspire confidence.
Earlier quoted context omitted.
Financially? Sure. Politically? Not a chance, they'll get bailed out or partially nationalized. Frontier labs will be considered essential to national security, Microsoft is basically a public utility at this point, Facebook is too important for the spread of propaganda (although this one has less of a case/justification for a government bailout), Amazon (via AWS) runs massive parts of the federal gov (along with Azu…
Is Google really a critical dependency for android? I've installed Lineage OS before which worked.
Smart to borrow when money is cheap if you think you can do something more profitable with it.
But money has not been cheap for a while now so this is interesting. And yes, if you can do something more profitable with it, borrowing is always smart no, regardless of how cheap it is?