It was fun while it lasted, but access to cheap capital has now disappeared for all but the highest-quality companies.
Investors no longer tolerate the kind of “profitless growth” that, because of record low interest rates, defined the 2010s. For proof, just look at the tech sector; some of these stocks, which were at all-time highs as recently as early 2022, are down more than 90%.
As bad as this market has been for these companies, the carnage isn’t finished yet. Dozens of these firms are essentially “drawing dead,” to borrow a phrase from poker, and they’ll soon be dead – bankrupt, at zero – if they can’t raise more debt or equity, very tough things to do in this market.
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