My gut feeling is that we have cash for about month, maybe two. After that god knows what will happen. It's just my gut feeling and I've been proven wrong many times. I hope I am wrong again.
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What happens when Honeywell's spinoffs are unable/unwilling to continue payments to Honeywell? These payments go directly to Honeywell's bottom line and are not adequately disclosed to investors. Garret has an equity market capitalization of $200 million with $1.2 billion of junk bond rated debt which is senior to the payments made to Honeywell. The board and CEO should both be sacked when their failed financial engineering spinoff experiment blows up.
Honeywell is well positioned. Doesn’t mean there won’t be furloughs. The leaders will definitely furlough all sites not labeled as critical infrastructure. The trouble they have is that all sites all likely labeled as such. We aren’t making electric cars.
The cash crunch hits when the supplier invoices start to come in while no product ships out the door. The problem becomes when a backlog gets turned into cancelled orders. That’s why management is always hellbent on fixing the backorder problem, because stranded orders have a probability of cancellation, much stronger when an Ultra Depression materializes in a matter of weeks. One bright spot are the defense orders are solid, so that cash trickle will keep Aero afloat.
We had 9 billy in cash/equivalents on the balance sheet end of 2019. A credit revolver with Citi. Just issued bonds with Deutsche. There is significant cost to run the business but you can literally estimate cash/burn by public disclosures. No need to guess. There’s almost certainly more than what you have estimated. Will things start to hit the fan in a few weeks? Yeah. Run out of cash? Maybe not.