A liquidity crisis is generally caused by a loss of confidence. The current liquidity crisis is caused by corona virus. Some Companies revenues have dried up virtually over night. For example the airline or the tourists industry. How do they pay employees or service debt with no revenue?
Losts of companies TRY to borrow more. But they have a hard time finding a lender willing too do so as they have no revenues. The demand for loans starts in increase interest rates even though central banks are trying to lower them.
As a last resort reserve bank start buying bonds or even issue new bonds and buy them back staight away. This is basicly printing money in a desperate effort to regain liquidity in financial markets.
Poromdo if you want to study nearmaps financials have a look at there financial reports. I bought nea 4 years ago because my industry uses it constantly to reduce costs and quote jobs faster and more accurately, and I personally like the product. I decided to keep my shares when they announced the US expansion. The US market is 10 times the size. I don't think nea will dominant the American market but they don't need to. It's such a huge market there is plenty of room for multiple players.
Because of the unprecedented financial crisis about to hit I am sure lots of business bad debts (nearmaps included) will rise as customers go bust. However Nearmap customers use it because it saves them money and time. Not because they like pretty maps.
I read the financial reports when they are released and have been happy with the US progress. All the figures are stated there in plain English.
NEA Price at posting:
96.0¢ Sentiment: Hold Disclosure: Held
