• j4k3@lemmy.world
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    1 year ago

    The interest rate hike in the USA by the federal government caused this. The companies can’t borrow money for nearly free any more. All the entities who would have been offering these loans are now able to buy government bonds with a much more guaranteed return on investment. This means the corporations must squeeze more profit out of their products to pay back loans. There are an enormous amount of large money transactions like this used to run a large business. They do not operate on cash reserves all the time. They have assets and are always evolving to stay relevant. Most businesses have enormous asset holdings but limited liquidity.

    • NaN@lemmy.blahaj.zone
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      1 year ago

      This best answers the OPs question. We know why it happens in general, but this is why everything is doing it in overdrive right now.

      I also think Spez is trying to rush into an IPO before the bottom truly drops out and the company folds.