Not everyone lost out on the bankruptcy:
Fosun Group from Shanghai is/was a major shareholder/investor in Thomas Cook. They released a statement in which they said they were “disappointed” the UK government did not bail TC out.
22 thousand employees worldwide, including the old country. This is going to affect flights in, there goes my cheap return through England.
This is the real reason. These management buy outs with investment funds and private equity play a game of pass the parcel with debt loaded companies. They load them with more debt each time they change hands, cut more costs, no real investment, extract massive pay deals, and then try to pass it on to the next one before it explodes.
How do I know?
I worked for a British company and a management group that acted exactly the same.
Manny Fontenla-Novoa, who led the acquisition spree that saddled the company with more than £1bn of debt, was handed more than £17m in just over four years as boss of Thomas Cook, boosted by bonuses awarded for slashing 2,800 jobs following the merger with MyTravel. He quit in 2011 as the tour operator came close to collapse.
His successor was Harriet Green, who was paid £4.7m for less than three years plus a share bonus worth a further £5.6m
Peter Fankhauser, who was in charge when the company collapsed, was handed £8.3m, including £4.3m in bonuses.
Now they have 7% of nothing?
It was 7% of short positions that were around 11% of all stock options. So 0,77% of all stock options.
Shorting works like this.
You borrow stock options from others for a fee and sell it immediately for cash.
Since you borrowed it, you have to eventually buy it back to return it.
If the stock crashed you buy it for a much lesser price, keeping the rest of the cash as profit.
If you have an open short position in a company that gets delisted and declares bankruptcy , then you don’t have to pay back anyone because the shares are worthless. Companies sometimes declare bankruptcy with little warning while other times there is a slow fade to the end.
Of course it can go the other way if the stock options go up, you have to pay up to buy the stock options you have to return, loosing money in the process.
All publicly traded companies face a threat from short-selling. As a publicly traded firm you must be able to withstand such a threat. Shorting TC didn’t cause it to fail, it was already teetering on the balance.
If anything, short sellers did the British taxpayer a favor by eliminating the feasibility of a public bailout.
Thomas Cook’s failure was due to problems much, much bigger than options trading. Poor management, a creaky business model, unprofitable operations: all of those bear far more blame for Thomas Cook going belly up than options traders. Blaming them is like blaming the sharks feeding on the corpse of a whale for its death.
1 billion debt piled on a bloated creaking business model with ravenous board of directors.
Just a matter of time before it collapsed
Just imagine how many other companies depend on these low interest rates to keep afloat.
Great thing about options trading is that you don’t have to be rich to buy puts.
Sure, if it turns out right!
Now it turned into Thomas Crook?
I’m proud of Greta Thunberg standing up for what she believes in. That said, I also have a sense of humor
Why is that subtitled in Dutch?
For people who speak Dutch?
That makes sense.
Theres a new Movie called “The Laundromat” on Netflix about different scandals involving fraud, off shore accounts such as Panama Papers and many others this would fit right in
Fosun has decided to take it over!