Re:The Young, Inexperienced Engineers Aiding Elon Musk’s Gov...
by offtotheraces on Tuesday February 04, 2025 @03:08AM
(#42929531)
Loans get issued based on profit generation (or asset value), so no, it is not “to keep them afloat”. You can’t get a loan if your company is not doing well or too risky (that’s why startups raise equity - because they are still too risky for someone to lend them money).
A loan is a form of debt, which is one of the two main forms of capital - the other main one being equity. Debt is less expensive than equity, so companies prefer to issue to raise capital via debt than equity.
Re:The Young, Inexperienced Engineers Aiding Elon Musk’s Gov...
by throwawayqqq11 on Tuesday February 04, 2025 @05:03AM
(#42930453)
Its not just profit that is considered for a loan. Anything related to states is more stable and thus less risky. Or how would you evaluate state bonds by profit only? Elon knows what i am talking about.
Is that $1.8B of revenue? Of profit? $1.8B of total funding in the last six months? In the last ten years?
Here’s $100M of funding for a 6% stake, four years ago:
https://siliconangle.com/2021/03/22/digital-identity-network...
Last year: a liquidity event for early investors and employees, none of which helps the ongoing business but instead lets the founders and C-suite buy a private island / holiday home / mobile home / home:
https://thepaypers.com/digital-identity-security-online-frau...
A $275M loan — not an investment, though you get a good deal if they default! — to keep them afloat?:
https://www.investing.com/news/stock-market-news/idme-secure...
The only rung deeper into the hype pit would be valuing them as a unicorn based on a too-big-to-fail government bailout.