Recently I came across this question when researching about Singapore Airlines’ (SIA) $15 Billion Rescue Package (funded mainly by their main shareholder, the Singapore Government-owned Temasek Holdings).

It got me thinking.

Is it ever a good idea to be investing in companies that need a large bailout from the government?

Although the word bailout may have a bad reputation, they are generally good for shareholders who are holding on to a company that is doing badly.

The injection of much-needed capital into a company can bring it back from the brink and shareholders will not have to worry about potential bankruptcies.

However, bailouts can reveal that the company was managing its finances poorly and that the business was not run well.

For the case of SIA, the main reason why it needed a S$15 Billion Rescue Package was due to fallout from the COVID-19 pandemic which has crushed demand for