![]() Of course, plenty of companies use debt to fund growth, without any negative consequences. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. But is this debt a concern to shareholders? When Is Debt Dangerous? Importantly, NVIDIA Corporation ( NASDAQ:NVDA) does carry debt. ![]() ![]() ![]() and every practical investor I know worries about.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about. ![]()
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