Why did bluewater go bankrupt?
/r//politics reddit title Blue Water, the $200 billion company that got bailed out by Congress, is back.
article redditors /r/politics reddit titles Blue Water has a lot of investors and analysts, but what’s the big deal?
article reddit title The Blue Water investment fiasco is not the first time the company’s stock has failed to live up to its hype article redditor /r/politics reddit article The Blue Shield of Florida is the third-largest insurer in the country, and the company has been struggling with skyrocketing costs.
But when it was facing a $300 million bond payment on February 1, Blue Water was forced to raise its debt rating, and its stock plunged to just $13 per share.
The next day, Blue’s stock fell to just 2 cents, and by Tuesday it had fallen to less than half its all-time low.
“The market was already going to buy it, but we ended up buying into it more than our analysts expected,” says Michael O’Leary, a managing partner at Blue Water’s investment advisory firm, the O’Learys.
“We’re now seeing a significant deterioration in the outlook, and we’re in a very precarious situation.”
Blue Water is the latest insurer in a series of financial scandals that have rocked the financial services industry.
In December, Wells Fargo announced it had settled charges with more than 600 employees in the US and Canada, including at least 15 workers who were fired for violating the bank’s anti-discrimination policies.
In October, JPMorgan Chase settled with the federal government over allegations that it lied about its sales practices to customers and employees.
And last month, Bank of America agreed to pay more than $2 billion to settle allegations that the bank misled customers about the risk of foreclosure.
Blue Shield, which was once the largest insurer in Florida, went bankrupt on February 10.
The company had a net income of $935 million in 2015, according to its latest annual report.
But its stock fell by more than 50% in 2017, to just 3 cents.
At the time of the bankruptcy filing, Blue was valued at about $4 billion, and had more than 3,000 employees.
But analysts say Blue’s losses have accelerated since then, and it has struggled to generate a sustainable revenue stream.
“It’s very hard to justify spending money in this industry and not get a return on your investment,” says Scott Harkins, the head of investment advisory and research at Morningstar.
“If you’re not going to do that, you should be going bankrupt.”
In the meantime, the company is seeking to restructure its debts and get the funds back into the business.
On February 18, Blue will have to give up some of its assets to get the debt restructured.
But if the restructuring process is unsuccessful, the bondholders will receive an unspecified amount of money to help cover their losses.
Blue Water shareholders are not likely to get a dime from the restructured debt, according the O`Learys, who believe the company should have put the proceeds into a special account that could have allowed it to pay off its creditors before its stock went bust.
As a result, the firm has not yet determined whether to pursue a sale or to take the company private.
The O’Eys also believe Blue could get the money it needs from the government.
“They could be very happy to get money from the Treasury,” O’Neill says.
On Thursday, Blue released a statement saying that it will use the proceeds from its sale to pay back the debt holders. “
Blue Water shares have fallen by almost 40% since the company went bankrupt, but they still represent a healthy valuation.
On Thursday, Blue released a statement saying that it will use the proceeds from its sale to pay back the debt holders.
But it also noted that the bond holders are entitled to up to $150 million, which could be a steep price to pay for the company.