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Wow - "Enter Korean tax code. Korea has 50% inheritance tax on assets above $2.5m. When Lee Gunhee dies, his family will owe the government $7b. The family will
by stanrivers 6y ago
Wow - "Enter Korean tax code. Korea has 50% inheritance tax on assets above $2.5m. When Lee Gunhee dies, his family will owe the government $7b. The family will have to sell personal stakes of Samsung-controlled assets, weakening the strong, complex investment structure they built."
That's pretty impactful in terms of potentially forcing the family to sell off control, isn't it?
- Anon1096 6y agoWhat happens if they aren't able to sell off the assets at a high enough price to pay the inheritance tax? Does the amount owed scale with how much the assets are actually able to fetch in a mass sell-off like this?
- H8crilA 6y agoThere is absolutely no problem with liquidating a $7B slice of equity in a matter of weeks (probably even days). People don't appreciate just how enormous the capital markets are.
- LudwigNagasena 6y agoIf it is a single stock it may still affect the price. That’s why big sell-offs are usually done over a long period of time, like weeks. People also don’t appreciate just how small the capital markets are and how much they rely on market makers.
- H8crilA 6y agoWeeks because you may need an actual human broker to find you counterparties.
- dereg 6y agoI don't think that's the right way to think about this situation. The fact that Lee Kun-Hee is dead means that the family's efforts to restructure the company, consolidate power, and offshore assets is complete. Elliot Management called out Samsung five years ago for malfeasance but their efforts were stymied by a government led by the former disgraced president, Park Geun Hye.
- maest 6y agoI'd expect them to be able to finance paying the taxes with an equity collateralised loan. If not the entire tax bill, at least a big chunk of it.
- H8crilA 6y agoSeems that more leverage and more debt is in fact the answer to everything. BRB, need to take a second mortgage to buy more equity index funds. I will then use the fund shares as a collateral for another loan, and you get the idea. I wonder why hasn't anyone thought of it yet! Time for a YC application!
- sushshshsh 6y agoIt's only stupid if it doesn't work!
- seibelj 6y agoStep 1 - get as many loans, credit card debt, financing etc. Step 2 - spend all the cash to buy bitcoin Step 3 - bankruptcy
- deleted 6y ago[deleted]
- smabie 6y agoI don't think zeroing out home equity to buy bonds is a bad idea. After all, you either have real estate exposure or some other one, bond or equity exposure. While I haven't done the analysis, I would venture to guess that investment grade bonds at the very least have lower volatility than real estate.
- stanrivers 6y agoDo you think the investment grade bonds are going to yield better than the interest rate on a home mortgage ?!?
- 6y ago
- plorkyeran 6y agoIf the theory is true, then the fact that they're announcing his death now means that they've finally put themselves in a position where they can pay the tax bill without giving up control of Samsung.