1/3 Caixin: "Although courts are enforcing bet-on agreements that...
Michael Pettis@michaelxpettis
49 views
Sep 17, 2024
~1 min read
Advertisement
1
1/3
Caixin: "Although courts are enforcing bet-on agreements that compel companies that miss their IPO deadline to buy back investors’ shares and pay additional interest on their capital, business owners are increasingly unable to make the...
caixinglobal.com/2024-09-12/in-…
Caixin: "Although courts are enforcing bet-on agreements that compel companies that miss their IPO deadline to buy back investors’ shares and pay additional interest on their capital, business owners are increasingly unable to make the...
caixinglobal.com/2024-09-12/in-…
2
2/3
payments, leaving PE/VC firms empty-handed.”
Nearly a decade ago I included these PE/VC buyback obligations as an extreme case of the kind of “inverted” balance sheet structures I warned against in my 2001 book.
payments, leaving PE/VC firms empty-handed.”
Nearly a decade ago I included these PE/VC buyback obligations as an extreme case of the kind of “inverted” balance sheet structures I warned against in my 2001 book.
3
3/3
These payment structures are a “good times” feature that end up exacerbating volatility in the overall economy at the worst possible time by costing nothing when things go well and creating unbearable costs for a part of the financial system precisely when things go wrong.
These payment structures are a “good times” feature that end up exacerbating volatility in the overall economy at the worst possible time by costing nothing when things go well and creating unbearable costs for a part of the financial system precisely when things go wrong.