Zombie companies

What is a zombie company?

“A zombie company is simply a company that is neither dead or alive. In other words, it is in so much debt that any cash generated is being used to pay off the interest on the debt or not actually reduce it, they have cut back as much as they can. This means that there is no spare cash or capacity for the company to invest or grow. This means that is unable to employ more staff but on the flip side as long as the company is not actually losing money on an operational basis it does not need to make further redundancies either.”https://www.companyrescue.co.uk/guides-knowledge/guides/what-is-a-zombie-company-3931/

Under the surface there is going to be a lot of turmoil in many industries, Moodys have produced the below heatmap of how different areas are likely to be affected:

No one knows what the impact of the cronavirus is going to be.

Looking at the Nasdaq you wouldn’t know there was an issue.

The low exposure bucket gives some explanation as to why the Nasdaq closed the week out at all time highs.

Money continues to flow from the old.

In to the new.


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