Dear Joseph - thx for the explanation. It is clearer to me now, as your comments seem to be dealing with bankruptcy issues. Obviously, being an equity holder, i.e., the *owner* of the co in question, the common shareholders will be the last to lay any claim. Indeed, at least in the US, bankrupted cos [Ch 11] very often get reorganized [with the approval of the debt holders] with 100% impairment to the common holders. That is not unusual. While I am not familiar with the corporate laws of SE Asian countries, I'd certainly agree such is the case also elsewhere as it is in the US.
However, there are many cos who are highly leveraged w/o such extreme impairment, as long as they remain solvent. And even for insolvent cos, like those in S Korea, there are still leeways for them to unload assets and/or to merge [with other cos] for a better prospect to weather the downturn. For my personal interpretation, i.e., others can certainly accept or reject it, rationality must be specific with premises fully exposed.
best, Bosco |
