Freeport-McMoRan (FCX)

[eddy2]

Sly you have a different way of looking at things. There are two components one is retained earnings that is debt that can be sold. The other is capital surplus debt purchased. Both debts are taxable hence your treasury stock and your shareholders deficit. The share holders deficit is tax due on retained earnings from the sale of the former debt purchased sold at a premium belongs to the current equity holders. The debt purchased belongs to the company and is represented by the outstanding shares held by all investors restricted or otherwise.

The treasury stock that represents the debt purchased is actullay collateral or another way to look at it as credit.

Credit minus debt on the books is the future working capital. The company can’t borrow more then what they have in credit for collateral. The company can’t sell debt that it can’t provide collateral for.

They can use todays earnings to establish additional collateral and in turn that debt can be sold.

This is not rocket science that we are discussing but is the fundamental understanding of the general health of a companies ability too move forward and growth and meet its cash flow obligations.

Is there concerns, well of course there is but with that comes opportunities. The higher the risk, if your not paying to much for that risk, the greater the rewards. We are at a cross road should commodity prices rise with new added trade tariffs things could turn positive. The debt on the books is concerning for new investors not so much for the old who hold the collateral that sold the debt.

She will be a bumpy ride ahead don’t get burnt by the falling candle stick. Jack be nimble Jack be quick and Jack make sure you leap over that falling candle stick.