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0 pointsvolak5y ago0 comments

You are assuming this deal is the same as previous ones. Its not even close

https://www.marketwatch.com/story/united-airlines-details-it...

Grants for employee salaries and benefits like health insurance, low interest loan to be paid back, and a stake in the company in the form of equity. And all with strings attached so they can't hand out bonuses or lobby congress.

Businesses operate on revenue and margin and companies like airlines can't justify using even 1% of its revenue to "save" for rainy days. Their tickets have to be as cheap as possible and they have to market to as many people as possible. Its unreasonable to ask them to lay out millions on the chance an act of god rolls through.

As a company they have plenty of ways to raise capital to weather major events, including selling stock, which is what they are doing - to the government in exchange for favorable loans and a grant.

0 comments

viklove5y ago

> Businesses operate on revenue and margin and companies like airlines can't justify using even 1% of its revenue to "save" for rainy days.

Huh. Where did they get the money for the stock buybacks they initiated last year?

volakOP5y ago

Repurchasing shares is what companies do with profits they cannot effectively leverage into new investments. I suggest you read https://en.wikipedia.org/wiki/Share_repurchase

But to sum up: if you are a company with $1 million on hand at the end of the year you have to disperse it somehow.

- If you put it in a bank account you'll earn 0.2% interest on your "investment"

- If you pay out dividends your shareholders will earn 1-2% (estimate) on their investments

- If you buy back your own stock your shareholders can see 4-5% (estimate) on their investments + you have shares you can award to employees in the form of options or direct without diluting the market

The number 1 factor in your decision? Taxes. Which option pays the least tax? Option 3

viklove5y ago

> Businesses operate on revenue and margin and companies like airlines can't justify using even 1% of its revenue to "save" for rainy days.

So you're admitting that this statement you made is just patently false, thanks.

j / k navigate · click thread line to collapse

0 pointsvolak5y ago0 comments

You are assuming this deal is the same as previous ones. Its not even close

https://www.marketwatch.com/story/united-airlines-details-it...

As a company they have plenty of ways to raise capital to weather major events, including selling stock, which is what they are doing - to the government in exchange for favorable loans and a grant.

0 comments

viklove5y ago

> Businesses operate on revenue and margin and companies like airlines can't justify using even 1% of its revenue to "save" for rainy days.

Huh. Where did they get the money for the stock buybacks they initiated last year?

volakOP5y ago

Repurchasing shares is what companies do with profits they cannot effectively leverage into new investments. I suggest you read https://en.wikipedia.org/wiki/Share_repurchase

But to sum up: if you are a company with $1 million on hand at the end of the year you have to disperse it somehow.

- If you put it in a bank account you'll earn 0.2% interest on your "investment"

- If you pay out dividends your shareholders will earn 1-2% (estimate) on their investments

The number 1 factor in your decision? Taxes. Which option pays the least tax? Option 3

viklove5y ago

> Businesses operate on revenue and margin and companies like airlines can't justify using even 1% of its revenue to "save" for rainy days.

So you're admitting that this statement you made is just patently false, thanks.

j / k navigate · click thread line to collapse