SNC Lavalin shares

[tmyrfield]

Wealthy people are sort of like farmers. Asset rich cash flow poor. Elon Must who is worth 20B just took out a $61M line of credit on his home. These guys hang on to hard assets no matter what. Shares are vapourware IMO.

https://business.financialpost.com/real-estate/mortgages/asset-rich-but-cash-poor-elon-musk-recently-took-out-five-monster-mortgages-worth-61-million Asset-rich but cash-poor

This is the problem with using FMV rather than book value on balance sheets to measure wealth. It looks good and lenders like it and will gladly make loans on it. |The trouble is that the wealth created is from inflation of assets rather than from business profits, only one of these will pay the bills as they come due, without taking on even more debt. Then eventually there is going to be a tax bill that comes from capital gains that needs to be paid, easier if the business is profitable. According to the article Tesla has never made a profit, [I]'m not sure it ever will.
Shares are like land and houses though, they are only worth what the last guy paid for them, the day may come when someone will say, hey it's just not worth that much.

[foragefarmer]

Elon Musk owns 33.7 million shares of Tesla worth appox 10 billion and he continues to buy them up. He see's something there.

Taking a $61 million line of credit out on his house was probably to buy more shares. Besides $61 million is chump change to him

I would say he has a lot of liquidity, as shares can be sold with a push of a button. Try that with a farmer's assets of land and machinery and getting fair market value!

[macdon02]

Wealthy people are sort of like farmers. Asset rich cash flow poor. Elon Must who is worth 20B just took out a $61M line of credit on his home. These guys hang on to hard assets no matter what. Shares are vapourware IMO.

https://business.financialpost.com/real-estate/mortgages/asset-rich-but-cash-poor-elon-musk-recently-took-out-five-monster-mortgages-worth-61-million Asset-rich but cash-poor

He's hedged the value of the property leaving the bank holding the bag. He has the cash value. Any downturn in property values and he'll simply turn it over. I don't think he cares about his credit rating.

[shtferbrains]

I bet they won't be allowed to.

They will have a parachute AND safety net to assure a soft landing.

Too big to fail.

Edit in: oh yeah it's QuebecCo based

So who is going to give this Co billion dollar contracts with their resentment multi-scandal reputation all over the world.

World Bank blacklist cuts it out of many of the shithole country projects.

Wiki lists 7 active investigation including our carbon capture'

https://en.wikipedia.org/wiki/SNC-Lavalin

Quebec got their ass handed back to them trying to support Bombardier.

Any provincial or local politics won't ant to touch them for fear of any whiff of problems.

This company may not fair as well as Bombardier.

I think their dead and don't know it yet.

[WiltonRanch]

Wonder what it would cost to short them? Bre-x shares took a while before they got to zero but that was a complete scam job. SNC-LAVALIN is a big player that might have no work abroad and essentially is done. This could be the black swan that crashes the TSX and maybe causes some turmoil in central Canada. I really don’t think there is a way Trudeau can bullshit his way out of this.

[farmaholic]

How about afew top executives fall on their swords, or the Co. sacrifices afew top brass at the Altar of Corporate "Restructuring" then rename/rebrand the Co.....and everyone will forget?

[WiltonRanch]

How about afew top executives fall on their swords, or the Co. sacrifices afew top brass at the Altar of Corporate "Restructuring" then rename/rebrand the Co.....and everyone will forget?

It will pretty much go that way but in the short term there is potential pain to come for those who have their portfolio riding on SNC-Lavalin

[furrowtickler]

Interesting read on reality...
https://business.financialpost.com/diane-francis/our-energy-industry-is-in-crisis-but-trudeau-is-too-busy-doing-damage-control-over-snc-lavalin-to-act

[burnt]

Not sure this will help values.

https://windsorstar.com/news/local-news/windsor-law-firm-strosberg-sasso-sutts-llp-to-investigate-snc-lavalin https://windsorstar.com/news/local-news/windsor-law-firm-strosberg-sasso-sutts-llp-to-investigate-snc-lavalin