RIDGEFIELD, Conn., July 1, 2015 /PRNewswire/ -- Southridge, a
diversified financial holding company specializing in direct
investment and advisory services to small and middle market
companies, has released comments on Greece's debt crisis which resulted in stock
prices falling around the world this week.
Stephen Hicks, Chairman and CEO
of Southridge, says, "The situation in Greece and closer to home in Puerto Rico right now remind us that what's
past is prologue. After joining the European Union, Greece did not abide by the requisite fiscal
constraints and leveraged itself onto the precipice of financial
ruin. Greece has been unwilling to
make the sacrifices which their partners require and missed their
required debt payment to the EU on Tuesday. Meanwhile, Puerto Rico currently has a debt 15 times
greater than the average state in the US as a percentage of its
economic output. Authorities in Puerto
Rico announced that they simply cannot pay their debt."
"Hedge funds have been busy buying and selling Greek and Puerto
Rican assets and debt, and placing their bets on the ultimate
resolution of these conflicts. However, there may not be timely
resolutions to these issues."
In the worst case, Hicks suggests that hedge funds invested in
the Greek economy can expect that Greece will be forced to exit from the EU and
they will need additional outside financing which will be under
onerous terms and will eliminate all or most of the current debt
holders' investments. In the best case, there will be a bailout
package and Greece will remain in
the EU. As for Puerto Rican debt holders, there is no guarantee by
other investors and the United
States government will likely not intervene.
"What can we learn from this? For starters, moral hazard almost
always leads to unintended consequences, and overreaction.
Secondly, hedge funds, will always try to exploit situations like
these, many times at their own expense," Hicks
adds.
About Southridge:
Southridge is a diversified financial holding company
specializing in direct investment and advisory services to small
and middle market companies. Since 1996 the structured finance team
has made direct investment of over $1.7b into growth companies globally. Our
expertise lies in our ability to customize a financing plan for the
prospective client and then execute on that plan without fail. For
more information, visit: www.southridge.com
RUBENSTEIN PUBLIC RELATIONS
CONTACT: ANU KHER 212-843-9240
AKHER@RUBENSTEINPR.COM
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SOURCE Southridge