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re: Fertitta Offers Record 15% Loan Rate to Save Empire
Posted on 4/10/20 at 9:38 am to Dire Wolf
Posted on 4/10/20 at 9:38 am to Dire Wolf
Geez, what was his days of cash on hand? 6 hours?
Obviously he has no real revenues right now and some expenses. So yes he has a major cash burn... but ouch.
Maybe he should put back in the other 150M of the 200M dividend he took, but I'm guessing that money was spent on other obligations.
I'm sure the Saudis will lend him as much as he wants at 15%... just like they are doing with the cruise lines.
Obviously he has no real revenues right now and some expenses. So yes he has a major cash burn... but ouch.
Maybe he should put back in the other 150M of the 200M dividend he took, but I'm guessing that money was spent on other obligations.
I'm sure the Saudis will lend him as much as he wants at 15%... just like they are doing with the cruise lines.
0
Posted on 4/10/20 at 9:40 am to Hangit
quote:
He has aboot $5 billion. It seems that he would prosper if he lent money to his companies at 15%. Is the NBA going to bail him out?
He has 5 billion in assets but his entire "empire" is insanely leveraged up. He doesn't have "money" to lend to the companies. And my guess is traditional lenders see how leveraged he is and wants nothing to do with that.
So, how do we get in on this deal? Can the little guys participate in this offering? Or is it just the rich get richer?
Posted on 4/10/20 at 10:21 am to LSUFanHouston
quote:
He has 5 billion in assets but his entire "empire" is insanely leveraged up. He doesn't have "money" to lend to the companies. And my guess is traditional lenders see how leveraged he is and wants nothing to do with that.
Posted on 4/10/20 at 10:24 am to Dire Wolf
Tron can give him a loan
This post was edited on 4/10/20 at 10:25 am
Posted on 4/10/20 at 10:25 am to LSUFanHouston
Any idea how much he could sell the rockets for right now? Or are they his money maker? Maybe he sells Golden Nugget?
At some point I gotta assume he looks into selling off some assets/ companies? 15% is incredible. That's a hell of a lot to repay, your margins have to be great to make money on that.
At some point I gotta assume he looks into selling off some assets/ companies? 15% is incredible. That's a hell of a lot to repay, your margins have to be great to make money on that.
Posted on 4/10/20 at 10:26 am to TheCaterpillar
quote:
15%!!!!! Holy smokes
If it seems to good to be true, it ain’t.
Posted on 4/10/20 at 10:38 am to baldona
quote:
Any idea how much he could sell the rockets for right now? Or are they his money maker? Maybe he sells Golden Nugget?
At some point I gotta assume he looks into selling off some assets/ companies?
What's the value of a business that currently has no revenue and no re-open date, and no idea how long it will return to "normal"?
Fertitta is a cheap SOB who buys assets cheap with little to no money down. I don't see him selling off assets at a low price.
quote:
That's a hell of a lot to repay, your margins have to be great to make money on that.
Maybe he thinks once business restarts, he can re-fi out of those. He probably has nice Margins on the casinos / hotels / Rockets, but the restaurant business seems to be low margin with high volume.
Posted on 4/10/20 at 10:39 am to JG77056
quote:No revenue incoming
What is he losing money on? He’s not paying any employees.
Posted on 4/10/20 at 10:42 am to LSUFanHouston
quote:
What's the value of a business that currently has no revenue and no re-open date, and no idea how long it will return to "normal"?
The value of an NBA team especially somewhere like Houston in a major market has to always be pretty high. Sure he isn't selling high, but just seems crazy to loan damn near $1 bil at 10%+ over selling off some assets.
How's his yacht doing these days? ETA: What's the burn rate on that thing? Probably $5 mil a month or so I bet, usually its something like 15-20% of the total cost of the boat per year in expenses.
This post was edited on 4/10/20 at 10:44 am
Posted on 4/10/20 at 10:48 am to baldona
quote:
Any idea how much he could sell the rockets for right now?
No idea but I’ve wonder what is the peak about that a franchise will sell for and still be profitable.
Posted on 4/10/20 at 11:05 am to TheCaterpillar
quote:
Yeah I knew that, but I guess I hadn't seen 15%. Just think about the difference between a 5% and 3% mortgage rate in terms of long term money owed and now think about the difference between 10% and 15% on hundreds of millions of dollars. Gives me chills
Ya on a 15-30 year loan it would be ridiculous but this is only a 3 yr loan
Posted on 4/10/20 at 11:15 am to lsu480
He may be a lot of those things but in Houston, he is at least giving at no charge meals to his laid off employees.
Posted on 4/10/20 at 11:15 am to Hangit
He doesn't have shite liquid. These moves make that abundantly clear.
Posted on 4/10/20 at 11:15 am to Dire Wolf
Looks like the University of Houston is gonna lose their biggest donation
Posted on 4/10/20 at 11:23 am to Tigeralum2008
In not saying he isn't bleeding cash, but some of his restaurants are still open doing take out only. Saltgrass in Metairie as an example.
Posted on 4/10/20 at 11:30 am to LSUFanHouston
quote:
Maybe he thinks once business restarts...
The businesses he is involved in will take forever to come back from this. Hopefully non-hospitality businesses will have "pent up" demand and many of their sales have been postponed but not lost. When you don't sell a hotel room for the night, that revenue is permanently gone. When you don't have asses in the seats at restaurants, you can never make that revenue back up.
In the near term, there are proposals floating around wherein restaurants and casino's can open back up but with reduced capacity. If some guy has a 300 seat restaurant and is told he can only seat 150 then he is screwed because he is paying rent/mortgage on an over-capacity facility (same goes for casino's).
Throw in the fact that every business he is involved in is based on disposable income and there won't be a lot of that for sometime.
Posted on 4/10/20 at 11:45 am to Dire Wolf
This is why you have an emergency fund. Have three months of expenses set aside into a money market account. That way if the economy shuts down you can make it. Fertitta never listened to Dave Ramsey and now he’s gonna see what happens. He needs to CUT THE CREDIT CARD!
Posted on 4/10/20 at 11:50 am to Dire Wolf
I like to call this Karma
Posted on 4/10/20 at 12:34 pm to Dire Wolf
quote:
Fertitta sees the new loan as an expensive insurance policy in the event that none of these businesses can reopen before the end of the year, the same person said.
Funny because he mentions insurance policies because he self insures all of his restaurants.
Posted on 4/10/20 at 12:37 pm to Adam Banks
quote:
This is why you have an emergency fund. Have three months of expenses set aside into a money market account. That way if the economy shuts down you can make it. Fertitta never listened to Dave Ramsey and now he’s gonna see what happens. He needs to CUT THE CREDIT CARD!
Dave has a place in business but if you can’t comprehend what he’s doing, I’m not sure what to tell you.
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