Zombie Companies
Companies that generate enough revenue to continue operating but cannot cover their debt servicing costs from current income, surviving only through continued borrowing or artificially low interest rates.
Used in the Books
This term appears in 1 chapter:
Biological Context
Zombie companies parallel organisms in metabolic decline that persist only through external life support. Like a patient on artificial respiration, they consume resources without contributing to ecosystem vitality. In nature, such organisms would be eliminated by predators or competition, freeing resources for healthier entities.
Business Application
Markets that support zombie companies—through easy credit, repeated bailouts, or regulatory forbearance—teach the wrong lessons to observers. The persistence of failing strategies makes it harder to distinguish signal from noise. Natural selection requires death to function.