The Merits of Fire Sales and Bailouts in Light of the COVID-19 Pandemic
Yves here. One thing to keep in mind when reading this post on fire sales in times of industry or overall economic distress: in normal times, most acquisitions fail (as in delivered a poor return on capital for the buyer) due to overpaying for the company. And that in turn is the result of how efficient the process of selling public and decent-sized private companies has become. Lots of bidders results in higher prices. One of the results of overpayment is squeezing hard, perhaps harder than initially planned, to wring out costs. While the authors point out that job losses are greater in fire...
Source: nakedcapitalism.com