Thread regarding Xerox Corp. layoffs

@m7 They spent $45 million, they really don't have to address debt due 2 years form now, while pi----g off the credit markets and effectively cutting off any future debt offering.

They didn't pay off 2028, just a small chunk of it.

If you have a good reason why they did this, please chime in.

@ar If something doesn't make sense to me.. I ask a few questions.. 1) are there things I'm not seeing 2) are there things I'm blind to because I have biases holding those views back and 3) If I was in sitting in a chair with an opposite view what would that belief be?

@g2 It still leaves me scratching my head why Starteepo even bought the stock initially.

90% of the current stockholders and 100% of the bondholders are underwater with Xerox. The only way the company continues to survive and avoid filing for bankruptcy is to reach a debt for equity swap with the bondholders. As a new stockholder, Starteepo wants to use their 6% holding to be an activist investor and have a say in this potential transaction to prevent their investment being erased or significantly diluted. I think the next quarter's results due in around 6 weeks will determine how quickly Xerox moves to reorganize their debt - probably before any investor or bondholder lawsuits prevent them moving forward.

@aq It would be intreating to know the stock price our 6% investor paid with the stock price closed around $3.50. Reducing debt could help maintain the stock price and if the purchase price was around 1.85 then it’s close to double purchase price.

A good return for less than a year and with the recent visit by management this could be a reason the debt was repurchased.

@aq It does not make sense. It is a smarmy distressed debt move, that risks, or has already triggered, a technical default with the other bond holders.

It's crack head economics.

Perhaps someone could clarify: if the company was already considering default, why reduce debt by repurchasing some of it in the open market?

Paying off part of the debt seems puzzling if bankruptcy looms—why not allocate that capital to vendors, dividends, or share buybacks instead?

As I understand the release, these were open market debt purchases, not private placements.

@aa spot on thanks for the insight - a calamity so to speak

OP Here:

It means they knew damn well this would set off a technical default rating, and they did it anyway. Why? To save $50 million bucks in 2028? No. They can no longer borrow a dime, and are spending $50 million bucks now they really don't have to spare?

Yes to advanced chance of default, and yes to this being premeditated.

@OP so this means what - a more advanced chance XRX will default or this is all acutely planned out……?