Amy Lopez6 said:I'm trying my best not to swear here, but—what kind of Capitalism is this? We're selling off a major Shipbuilder for a single Dollar while simultaneously throwing $25 billion at bailouts for failing auto companies?
It seems American Capitalism has reached a point where we dumped $13 billion into shipyards—seriously guys, $13 billion—and it looks like most of that money just ended up in someone's pocket!!!!!!!!!!! And now that there’s nothing left to squeeze from the Treasury, let's just hand it over for 1 Dollar!?!?!?!
I mean, where does this happen... we really are fools... it’s just a shame for us and for the whole country.
This has absolutely nothing to do with American Capitalism.
You can't take one weird outlier or a handful of similar messes and use them to make sweeping statements about how the whole system works. These shipyards were dead in the water long ago, ever since they were state-sponsored relics from the days of Communism. We're just dealing with the wreckage that broken system left behind.
What’s a company actually worth? That depends on how you measure it. In a standard market economy, value is based on profit—what it makes now and what it's expected to make down the road. If it isn't making money and looks like it never will, you liquidate it. That’s
market value. That's what tells you its current stock price.
But when you're talking about a startup being built from scratch, market value doesn't exist because the company isn't even on the market yet. In those cases, you talk about the
construction cost. It’s whatever it costs to build the facilities, buy equipment, do market research, run ads, train staff, and so on.
When a company is totally busted, market value is gone. Instead, you have what's called
liquidation value. That represents how much cash you'd get from selling off every single asset after you've paid off all the debts.
So, what are we looking at with these shipyards? They have
negative value. Basically, if you sold everything they own, the cash wouldn't even cover their debts. Most creditors would be left with nothing. Even if mortgage holders got paid first, everyone else gets jack squat.
Which brings up the real question: who would actually want to take these over, and under what terms? Obviously, nobody wants them without some serious government sweeteners.
That one-dollar price tag is just a technicality to say the company was "bought" rather than gifted.
Since the price is a joke, the real negotiations are about the other conditions—which are way more important than a price tag that doesn't mean anything anyway.