Foam The Runway

外汇网2021-06-19 15:58:46 209

A term indicating the last-minute infusion of cash into a company about to go bankrupt. Airports foam runways prior to an imminent crash landing to help reduce friction and sparks. Just as foaming the runway is a last stand against a horrible crash landing, a company obtaining a loan to stay in business is a last stand against going under.

"Foam the runway" is also a general statement in business, which refers to pparing for a potential disaster.

If a company is in trouble before having to obtain an infusion of cash, foaming the runway will usually just delay the inevitable. Prudent investors should not assume that a cash infusion will save a company, and should carefully review all available information before making an investment decision.

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