In article <CAAeewD-OkTmGp5-tMRXChkh9Y2+NFkWKDYJjMyT0uwfP2_40Rg@mail.gmail.com> you write:
On Wed, 27 May 2020 at 10:00, Mel Beckman <mel@beckman.org> wrote:
Hertz car rental has the #1 product in its industry, even its major
competitor Avis agrees (“We’re number two“:-), and yet Hertz stock is plunging towards zero even as we speak. ...
However Hertz depreciation is caused by the anticipation that debtors will receive almost all of the equity, diluting the current owners by massive ratio. ...
Hertz suffers from an over-clever structure in which they lease their cars from special purpose funds owned by private investors. Since there is currently no demand for airport car rental, nor any demand for used cars, the value of the cars has dropped, and Hertz got what was in effect a margin call. But since there is no demand for airport car rental nor used cars, Hertz has no revenue with which to pay the margin calls. Uh, oh, repo time. This doesn't tell us much beyond the fact that if you are in a business in which an unforseen event destroys both your income stream and the value of your major asset, you are in trouble. As far as I know neither applies to makers of routers and other Internet hardware.