What we've learned from IMSCQ shareholders. Only in the pink sheets have I seen these concepts mentioned. Lets review them:
When you take out debt your lender watches your business. Even though they are not the management team they tell management what to do. If the loan is a significant part of their lending, they even manage the company more. They even dictate pricing and can force management into pricing against its will. I've never seen this mentioned on any investment website, nor ever heard of any of it... until IMSC!
Given this, I think we should expect the lenders to start to be on the company earnings conference calls, since they are calling so many of the shots.
(One would think that if this were true, analysts would start to quote who the lenders are for each company, and discuss the lenders expectations/rules for the company, since supposedly the lenders have so much say. I wonder why in all the thousands of analysts reports I've read, I've never seen an analyst discussing the role the lenders were playing in the operation of the company. Well, now we've learned, those professionals making millions have it all wrong. Pink sheet stockholders have something to teach the professionals, apparently)
In addition, when a company fails, if they have debt, its partly to mostly the lenders fault. You see, they shouldn't price the debt too high. They should price it as however best fits the lenders desires. And if the lender can't make the payments or repay the principal, the lenders should just let it go, or give the company more money. I know that sounds like a something out of a socialist economy, but no, apparently not, it's what is supposed to happen with a lender here we are told!
Beyond this, if all else fails, just blame the lender! Not the management, not the shareholder who bought the shares and held despite the insane debt levels and cash burn every quarter! It's the lenders fault!
Don't ever ask me why I follow the pinks. It's for this kind of entertainment!
