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If Goldman are raising money from investors it's probably because they think they can charge those investors for advising on and structuring a deal. It doesn't

If Goldman are raising money from investors it's probably because they think they can charge those investors for advising on and structuring a deal. It doesn't mean Goldman are buying Celsius. It's only a vote of confidence in Celsius to the extent that it means Goldman think they can find people who want to buy it and who will pay an investment bank to do so.

joshcryer 4y ago
They are raising money for liquidation, they will pay back users a fraction of what they originally deposited, and then play with some rows on an excel spreadsheet and walk with millions. Celsius can't go back live because the bank run would destroy the entire thing just like with Terra.
- dragontamer 4y ago
  Note that Terra/Luna was an algorithmic stablecoins, while the Celsius situation is kinda-sorta more like a proper bank run. Rumors of losses from exposure to 3 arrow capital causing a stampede of users forcing Celsius to shut down. There is a Celsius coin that kinda is like terra but really is quite different. They seem to have completely different mechanics, aside from failing within a month of each other there is almost no other mechanical similarity between these situations.
  - lolc 4y ago
    Another similarity is that both are too complicated to explain.
adrr 4y ago
$2B for what was suppose to be $12B of AUM. Doesn’t sound like a vote of confidence. Question is what priority are funds distributed. Depositors are unsecured creditors. Are there secured creditors that would be before them?
- metacritic12 4y ago
  If it's like any bailout of the past, it probably zeroes a lot of people. A troubled company's balance sheet usually looks like: Assets: A Mess Liabilities: A Mess None of the claimholders (liabilities) know what they can withdraw, when, etc. A "buying asset" bailout often happens when someone (like Goldman here) comes in to buy only the gross assets. They will pay $2 bln in cash for the assets, and divorce the two messes. The two companies afterwards are now: NewCo: Asset: A Mess Liabilities: None, other than their new single equityholder, Goldman. OldCo: Asset: $2bln Liabilies: A Mess. NewCo is controlled by one person (or a tight group) and can unwind its positions slowly at leisure, waiting for prices to go up, with no more (financial) liquidations. OldCo has a much easier time. All creditors are called to line up in order. A judge decides who is most senior. The senior most people go collect their money (chunk of $2bln first). People queue up until the money is gone. In the highly unlikely case there is any money left after all claims are paid, the money goes to the old Celcius equityholders.
- moneywoes 4y ago
  Any precedent for this?
- prirun 4y ago
  You can bet the highest priority will be to Goldman, with anyone else coming after.

joshcryer 4y ago

They are raising money for liquidation, they will pay back users a fraction of what they originally deposited, and then play with some rows on an excel spreadsheet and walk with millions. Celsius can't go back live because the bank run would destroy the entire thing just like with Terra.

dragontamer 4y ago
Note that Terra/Luna was an algorithmic stablecoins, while the Celsius situation is kinda-sorta more like a proper bank run. Rumors of losses from exposure to 3 arrow capital causing a stampede of users forcing Celsius to shut down. There is a Celsius coin that kinda is like terra but really is quite different. They seem to have completely different mechanics, aside from failing within a month of each other there is almost no other mechanical similarity between these situations.
- lolc 4y ago
  Another similarity is that both are too complicated to explain.

adrr 4y ago

$2B for what was suppose to be $12B of AUM. Doesn’t sound like a vote of confidence. Question is what priority are funds distributed. Depositors are unsecured creditors. Are there secured creditors that would be before them?

metacritic12 4y ago
If it's like any bailout of the past, it probably zeroes a lot of people. A troubled company's balance sheet usually looks like: Assets: A Mess Liabilities: A Mess None of the claimholders (liabilities) know what they can withdraw, when, etc. A "buying asset" bailout often happens when someone (like Goldman here) comes in to buy only the gross assets. They will pay $2 bln in cash for the assets, and divorce the two messes. The two companies afterwards are now: NewCo: Asset: A Mess Liabilities: None, other than their new single equityholder, Goldman. OldCo: Asset: $2bln Liabilies: A Mess. NewCo is controlled by one person (or a tight group) and can unwind its positions slowly at leisure, waiting for prices to go up, with no more (financial) liquidations. OldCo has a much easier time. All creditors are called to line up in order. A judge decides who is most senior. The senior most people go collect their money (chunk of $2bln first). People queue up until the money is gone. In the highly unlikely case there is any money left after all claims are paid, the money goes to the old Celcius equityholders.
moneywoes 4y ago
Any precedent for this?
prirun 4y ago
You can bet the highest priority will be to Goldman, with anyone else coming after.