The looming debt crisis for tech companies like The RealReal – The Information

In 2020, a wave of publicly traded tech companies — including The RealReal, Vroom, and Redfin — began selling record amounts of ultra-low-yielding bonds that would convert into shares if the companies’ stocks continued to rise. Instead, stocks have been crushed and some companies are now faced with a wall of potentially crippling or price-disrupting debt.

According to interviews with investment bankers and an analysis of company financial statements, several companies that have sold convertible bonds will likely struggle to refinance them or find the money to pay them off unless their fortunes change soon. If they refinance, it’s likely to be a lot more expensive. For some companies, the crisis could lead to sales efforts.

#looming #debt #crisis #tech #companies #RealReal #Information

Leave a Reply

Your email address will not be published. Required fields are marked *