Replies to post #21271 on Resonate Blends Inc (KOAN)

[bluegloop]

Here's your txhd default theory getting shot right out of the water...

This sums it up neatly and accurately>>

The strategic default option becomes valuable when a firm is overlevered and therefore reduces equity beta. In addition,
firms are more likely to be overlevered when they have large strategic advantages in distress renegotiations with their debt holders.