Financial Glossary: Zombies


en			ru			jp

Zombies

Zombies

Companies that continue to operate even though they are insolvent. Also known as living dead.

Zombies are companies that continue to operate even though they are insolvent or near Bankruptcy. Zombies often become casualties to the High costs associated with certain operations, such as research and development. Most analysts expect zombie companies to be unable to meet their financial obligations.

Because a zombie's life expectancy tends to be highly unpredictable, zombie stocks are extremely risky and are not suitable for all investors. For example, a small biotech firm may stretch its funds extremely thin by concentrating its efforts in research and development in the hope of creating a blockbuster drug. If the drug fails, the company can go bankrupt within days of the announcement. On the other hand, if the drug is successful, the company could profit and reduce its liabilities. In most cases, however, zombie stocks are unable to overcome the financial burdens of their High burn rates and most eventually go bankrupt. Also known as the "living dead" or "zombie stocks".

Posted by Privatebanking.com

Back

Privatebanking.com

Get the attention you always wanted and promote your corporate image and standing by benefiting from our state of the art interactive web presence.

Ascent Limited

Experience The Difference. Ascent Limited provides first class wealth management and family office services. Our private banking team, assembled from a group of highly experienced banking professionals, will provide financial advice tailored to your individual requirements and keep your portfolio in tune with the latest market developments and opportunities.

©	Copyright by PRIVATE BANKING.COM 2002- - All rights reserved.