Unprofitable firms to be treated harshly in rising rate environment

January 11, 2022

Companies which are yet to reach profitability could find investors becoming more impatient of results once interest rates start to rise.

Speaking to Money Management, Max Cappetta, chief executive and senior portfolio manager at Redpoint Investment Management, said investors were currently willing to wait for results. However, once rates started to rise, they could likely be more demanding.

Particularly in the IT space, many companies were still unprofitable and giving long-term guidance of being profitable in three to five years.

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