Ok, but I still don't get it. Look, if I have the ability to buy stock down to 10% margin, that means that I can buy $1,000,000 worth of stock with only $100,000 worth of capital. If I now change my business model and decide that I will only be able to operate on 50% margin, then I have to sell a whole lot more than $100,000 worth of stock to meet that requirement; indeed, I have to sell $800,000 worth of stock, even though I only have net assets of $100,000.
So....if LTC wants to raise their margin requirements from the outrageous of about 1% to a more reasonable 50%, they will have to sell $450,000,000,000 worth of stock, even though their net assets are just 5 billion.
-Sword |
