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Let's say there is a court case where the judge awards all shareholders of AAPL $100 of compensation for every share held (It's to the shareholders, but not the

by meric 9y ago

Let's say there is a court case where the judge awards all shareholders of AAPL $100 of compensation for every share held (It's to the shareholders, but not the company, because the court case involved shareholders vs management). The government sends $100 per share to each registered holder. Your investment fund is the registered holder of AAPL securities instead of you. Do you get $100 per share that was held on your behalf, or do the operators of the investment fund get it?

baddox 9y ago
I think that's a great analogy for each of us thinking about our own ethical intuition. But if you're literally asking what would actually happen, I'm guessing the answer is...there would probably be a lawsuit and the courts would figure it out. Which is probably exactly what will happen here, if Coinbase continues to not support the Bitcoin fork and its value holds long enough.
- keredson 9y ago
  not likely. corporate payouts happen all the time based on share ownership.
WorldMaker 9y ago
Isn't that just a dividend at that point? In the real world investment funds have fairly complex dividend rules (how much is reinvested in the fund, how much is skimmed for fund manager fees, etc), and regulations have managed to force such funds to disclose all of those policies up front (prospectus) and keep them up-to-date. In the other fork in this discussion thread, the banking analogy: we're talking about an exotic interest payment of sorts. Again here, banking regulations require banks to disclose interest rates and payment details and management fees up front for accounts. But banks in the real world are largely allowed to reap the majority of profits from an investment that goes well, and doesn't have to apply much if any of that back to the savings accounts from which it utilized stored funds to fund that investment. Which is to say that Coinbase may be doing nothing wrong according to either real world analogy, with the big difference being the "wild frontier" of existing in an under-regulated space with fewer up-front disclosure guarantees.
- meric 9y ago
  Both this and dividends are payments to shareholders but this is different because it's not funded by the company itself. It's a third party electing to pay every shareholder. Also, dividends are regular events, but getting a new asset that can be traded is not.
  - WorldMaker 9y ago
    I guess that depends too on what you think "the company" is in this case, going back to struggling with whether or not this analogizes to a stock split or not.
    - meric 9y ago
      In the AAPL example, it's not a stock split.

by meric 9y ago

baddox 9y ago

I think that's a great analogy for each of us thinking about our own ethical intuition. But if you're literally asking what would actually happen, I'm guessing the answer is...there would probably be a lawsuit and the courts would figure it out. Which is probably exactly what will happen here, if Coinbase continues to not support the Bitcoin fork and its value holds long enough.

keredson 9y ago
not likely. corporate payouts happen all the time based on share ownership.

WorldMaker 9y ago

Isn't that just a dividend at that point? In the real world investment funds have fairly complex dividend rules (how much is reinvested in the fund, how much is skimmed for fund manager fees, etc), and regulations have managed to force such funds to disclose all of those policies up front (prospectus) and keep them up-to-date. In the other fork in this discussion thread, the banking analogy: we're talking about an exotic interest payment of sorts. Again here, banking regulations require banks to disclose interest rates and payment details and management fees up front for accounts. But banks in the real world are largely allowed to reap the majority of profits from an investment that goes well, and doesn't have to apply much if any of that back to the savings accounts from which it utilized stored funds to fund that investment. Which is to say that Coinbase may be doing nothing wrong according to either real world analogy, with the big difference being the "wild frontier" of existing in an under-regulated space with fewer up-front disclosure guarantees.

meric 9y ago
Both this and dividends are payments to shareholders but this is different because it's not funded by the company itself. It's a third party electing to pay every shareholder. Also, dividends are regular events, but getting a new asset that can be traded is not.
- WorldMaker 9y ago
  I guess that depends too on what you think "the company" is in this case, going back to struggling with whether or not this analogizes to a stock split or not.
  - meric 9y ago
    In the AAPL example, it's not a stock split.