...you don't find it odd that they need a loan $700k above their equity value?
Their debt:equity is 0.08. That's nothing!
Why would they need a bailout in excess of total corporate value?
Interesting fact is there ROE is 5.97% which the analysts consider underperforming in their peer group.
A skim to get cash flush to up dividends & get the analysts off their back.
With taxpayer money.
BTW: given their minimal debt the entire value of the company is equity. If half their total capitalization was debt, the ROE would be 11.94% & nobody would have said a word.
And a 1:1 D/E is below average which is good.
Something's fishy.

Celerity

(43,458 posts)

12. grifters gonna grift, this bill (+ the 4 trillion the Fed tossed out) was a giant shitshow

Reply to ProfessorGAC (Reply #11)

Tue Apr 21, 2020, 09:00 PM

Apr 2020

And they are all coming back for more. A truly gigantic wealth transfer up to the pyramidion, and will be used by the Rethugs to try and strangle the already pathetic American social safety net and Social Security, Medicare, etc.

A great looting.

Igel

(35,323 posts)

17. Look at the name of the loan program.

Reply to ProfessorGAC (Reply #11)

Tue Apr 21, 2020, 10:44 PM

Apr 2020

Payroll protection program.

It gives a loan to the company. They use almost all of it to maintain their employees on their payroll instead of laying them off. But it means they can't actually be doing their job--the business has to be closed, this is payroll substitute not payroll subsidy.

No loan, laid off workers file for unemployment, might not come back. Loan, workers keep tenure, stay on the payroll, draw salaries.

If they do that according to the loan's requirements, the loan gets converted into a grant and is forgiven.

A loan above their equity just means that they, for the length that the PPP is good for, have a payroll + 10% that's $700k above their equity value.

People read the name of the program, read what it's for, and then think that it's money that goes to the business for the business to use as it sees fit.

ProfessorGAC

(65,101 posts)

18. I Did Some Digging

Reply to Igel (Reply #17)

Tue Apr 21, 2020, 11:24 PM

Apr 2020

They seem to have quite a lot of cash on hand. They actually have enough to pay down all debt with <40% of cash. This suggests they could easily strike a deal with lenders to tack 3 or 4 months on the back end and use existing nonperforming cash to cover overhead.
Essentially no long term external investment but low long term debt & no short term or RLOC.
The FY end May 31, so this last year isn't posted yet.
But FY ending May 2019, shows negative net income, no dividend paid, and oddly enough, no depreciation meaning the net income being negative wasn't because of some large reinvestment in the recent past.
Also, revenue went down $1.6 million 2018 to 2019, but SG&A went up $2.2 million with ZERO R&D.
Cost of revenue was $55million, so you're likely right that holding salary & benefits for 60-90 days would cost $6.5million.
But, these numbers look to me like they're working the system to avoid adding debt. Using tax money to buy them time.
I'm really suspicious about that big jump in SG&A while revenues declined.
While I buy your view on salaries, my suspicions are unabated.

Whiskeytide

(4,461 posts)

19. It's a loan. For the most part, there are ZERO ...

Reply to Igel (Reply #17)

Tue Apr 21, 2020, 11:42 PM

Apr 2020

... restrictions on what they use it for. It’s forgiven if they use it for payroll. If they don’t, they have to pay it back ... at 1%. Taxpayers subsidize it so the banks won’t lose $.

It’s a shitshow. The opportunities for corruption are many, and we will be left holding the bag.

underpants

(182,848 posts)

3. OptiNose (not OptiGrab) is a allergy pharma tradings at $3.71

Reply to rdking647 (Original post)

Tue Apr 21, 2020, 07:18 PM

Apr 2020

https://www.optinose.com/

Ferrets are Cool

(21,108 posts)

6. And my small company couldn't even get 10K

Reply to rdking647 (Original post)

Tue Apr 21, 2020, 07:43 PM

Apr 2020

They must know for whom I voted in the last 10 elections.

pwb

(11,280 posts)

7. How does that work? They pay employees who have been collecting

Reply to rdking647 (Original post)

Tue Apr 21, 2020, 07:43 PM

Apr 2020

unemployment insurance ? likely they keep it.

jimfields33

(15,859 posts)

8. I don't know any of these companies

Reply to rdking647 (Original post)

Tue Apr 21, 2020, 07:58 PM

Apr 2020

I’ve heard of potbelly. I guess a restaurant, but I e never eaten there. I can’t even have a decent boycott on these companies.

Hoyt

(54,770 posts)

9. Fortunately, all that adds up to less than 0.08% of PPP funding. The restaurant companies met

Reply to rdking647 (Original post)

Tue Apr 21, 2020, 08:05 PM

Apr 2020

Last edited Tue Apr 21, 2020, 09:17 PM - Edit history (1)

requirements of employees per location. Not sure how the other companies met the requirements unless they have small staff. But, again, the amount is really small and some -- perhaps all -- of those companies will have to pay it back.