6 ms·

Sam Bankman-Fried's $16B Fortune Is Eviscerated in Days

79 points by VagueMag 4y ago

fdgsdfogijq 4y ago
- the_optimist 4y ago
  Furthermore, promised willing Democrats a regulatory-capture sinecure with "well-north of $100M and up to $1B" in donations in 2024, now desanguinated. I do wonder if any of the promised fintech innovation in FTX will be recoverable.
pinewurst 4y ago
https://archive.ph/hNKcd https://archive.ph/hNKcd
cocacola1 4y ago
Having your fortunes eviscerated and remaining a billionaire. That’s something else.
- lost_tourist 4y ago
  might the reality check he needs to diversify lol
- tedunangst 4y ago
  (Minus) 94% of $16 billion leaves him a bit short of three commas.
  - totalZero 4y ago
    I thought the same but the article rounds to 1. That leaves SBF’s net worth at about $1 billion, down from $15.6 billion heading into Tuesday. The 94% loss is the biggest one-day collapse ever among billionaires tracked by Bloomberg.
Finnucane 4y ago
I have an nft of a tiny violin.
- smitty1110 4y ago
  BRB, minting an NFT for Liebesleid. But when I'm done, we should talk. /s
- ackbar03 4y ago
  If you can't cash out then it's really just a jpg
- ergocoder 4y ago
  Tiny violin indeed. He still has 400M....
tschwimmer 4y ago
94%... unbelievable. I have to assume these billionaires have access to someone with familiarity with modern portfolio theory (or someone who has heard the word 'diversification' and has functional internet connection) so one has to conclude that he intentionally decided derisking. Pretty wild...
- thaumasiotes 4y ago
  > I have to assume these billionaires have access to someone with familiarity with modern portfolio theory (or someone who has heard the word 'diversification' and has functional internet connection) He is one of those people. The article notes he was a Jane Street trader.
- s5300 4y ago
  Didn’t listen to enough Wu-Tang Though, I guess Wu is for the children, so SBF was unfortunately too old for their sage advice
  - smt88 4y ago
    SBF was 1 year old Wu-Tang debuted
    - s5300 4y ago
      I don’t think that they themselves realized they had to diversify their bonds until some time after.
- fshbbdssbbgdd 4y ago
  When most of your wealth is in funny money that you printed, diversifying is easier said than done.
- ALittleLight 4y ago
  I wouldn't diversify if I were in his position. If my wealth dropped from X billion to Y hundred million - so? I'm still living a life of luxury. I'd much rather be All In on the main venture and not have the distraction of money and money management.
JumpCrisscross 4y ago
> might come as a shock to investors including Softbank Vision Fund, Singapore wealth fund Temasek and Ontario Teachers’ Pension Plan, who sunk $400 million into the exchange at a $32 billion valuation in January
- VagueMag 4y ago
  all these pension plans and retirement funds are sinking tons of money into Tesla stock up here too, you love to see it
- peteradio 4y ago
  It sounds like a lot, but Ontario Teachers’ Pension Plan commands 200+ billions. Might have made some sense as a strategy.
  - origin_path 4y ago
    How many teachers are there in Ontario?!
- hahaxdxd123 4y ago
  I swear Ontario Teachers' Pension Plan is one of the worst managed funds I've seen. Every time I see buzzy company with little fundamentals, their latest rounds always includes this pension plan. Can someone explain their positions? Like if they want to move along the risk-reward curve, why not just buy fewer bonds and more ETFs? Why enter VC/crypto/etc?
  - laluser 4y ago
    I am guessing because they have over 200-250B in assets, they will have some occasional risky bets here and there that seems like a lot, but is only a small percentage of their overall portfolio.
  - chollida1 4y ago
    They are one of the best run pension funds in The world. They manage billions, their bc portfolio is a small part of their holdings but it’s been a bit money maker for them.
roughly 4y ago
For context, his remaining fortune is around $1Bn, or the combined net worth of Sundar Pichai and Satya Nadella.
- rokob 4y ago
  Where are you getting that? Sundar has more than $1B.
seibelj 4y ago
throwup 4y ago
In 2019, FTX tried to attack Binance's futures platform. CZ tweeted about it then: https://twitter.com/cz_binance/status/1173418810918916096 https://twitter.com/cz_binance/status/1173418810918916096 Instead of retaliating, he generously invested in their company. Then waited for years. And when the moment was right, he crushed their business overnight with a single tweet, then swooped in to buy what remained. Check and mate. Do not pick a fight with a billionaire.
- usednet 4y ago
  More accurately, don’t pick a fight with a real billionaire if you’re a paper billionaire.
m3kw9 4y ago
Hot air fortune
yarg 4y ago
It's crypto, the biggest bubble/ponzi that has ever existed. He never had $16,000,000,000. It's not $16,000,000,000 if you cannot exchange it without the market crashing.
- woah 4y ago
  Wait then nobody has any money
  - rippercushions 4y ago
    Yup, if your "money" is in the form of tokens.
    - _hyn3 4y ago
      (or any other fiat currency, which values are set by their country's central bank instead of backed by bullion reserves)
  - colinmhayes 4y ago
    Bezos sells tens of billions of dollars of amazon shares some years.
  - lumost 4y ago
    At an abstract level this is true for all capital assets to some extent. The price level correlated with the velocity of exchange for the asset class, if everyone in Boston tried to sell their house tomorrow the market would crash, even though on paper the real estate value of Boston is around 100 billion. On the other end, you can sell 100 billion in treasuries without a problem (fingers-crossed). On a day to day basis the trading volume relative to the size of the asset is minuscule. Economists track money locked into different tiers of static assets as different money supply tiers. M0 is the money that gets used to buy your morning coffee, M4 is things like government bonds and housing. There are different tiers in between for things like your car, an assembly line, or a stock. The reason the rampant money printing of the last decade didn’t effect inflation was due to the money being locked up in the low velocity tiers which have ballooned in size over the last decade. Any event which causes people to liquidate these assets such as war, supply disruption, energy crises, or disease moves inflation higher as the asset battery gets deployed to fight the crises. Biggest historical example of this was the WW2 where all sides had to adopt measures to counter inflation.
joezydeco 4y ago
Does this mean my fortune cookies will go back to normal?
dang 4y ago
Related ongoing thread: Binance to acquire FTX - https://news.ycombinator.com/item?id=33520585 https://news.ycombinator.com/item?id=33520585 - Nov 2022 (550 comments)

79 points by VagueMag 4y ago

fdgsdfogijq 4y ago

the_optimist 4y ago
Furthermore, promised willing Democrats a regulatory-capture sinecure with "well-north of $100M and up to $1B" in donations in 2024, now desanguinated. I do wonder if any of the promised fintech innovation in FTX will be recoverable.

pinewurst 4y ago

https://archive.ph/hNKcd https://archive.ph/hNKcd

cocacola1 4y ago

Having your fortunes eviscerated and remaining a billionaire. That’s something else.

lost_tourist 4y ago
might the reality check he needs to diversify lol
tedunangst 4y ago
(Minus) 94% of $16 billion leaves him a bit short of three commas.
- totalZero 4y ago
  I thought the same but the article rounds to 1. That leaves SBF’s net worth at about $1 billion, down from $15.6 billion heading into Tuesday. The 94% loss is the biggest one-day collapse ever among billionaires tracked by Bloomberg.

Finnucane 4y ago

I have an nft of a tiny violin.

smitty1110 4y ago
BRB, minting an NFT for Liebesleid. But when I'm done, we should talk. /s
ackbar03 4y ago
If you can't cash out then it's really just a jpg
ergocoder 4y ago
Tiny violin indeed. He still has 400M....

tschwimmer 4y ago

94%... unbelievable. I have to assume these billionaires have access to someone with familiarity with modern portfolio theory (or someone who has heard the word 'diversification' and has functional internet connection) so one has to conclude that he intentionally decided derisking. Pretty wild...

thaumasiotes 4y ago
> I have to assume these billionaires have access to someone with familiarity with modern portfolio theory (or someone who has heard the word 'diversification' and has functional internet connection) He is one of those people. The article notes he was a Jane Street trader.
s5300 4y ago
Didn’t listen to enough Wu-Tang Though, I guess Wu is for the children, so SBF was unfortunately too old for their sage advice
- smt88 4y ago
  SBF was 1 year old Wu-Tang debuted
  - s5300 4y ago
    I don’t think that they themselves realized they had to diversify their bonds until some time after.
fshbbdssbbgdd 4y ago
When most of your wealth is in funny money that you printed, diversifying is easier said than done.
ALittleLight 4y ago
I wouldn't diversify if I were in his position. If my wealth dropped from X billion to Y hundred million - so? I'm still living a life of luxury. I'd much rather be All In on the main venture and not have the distraction of money and money management.

JumpCrisscross 4y ago

> might come as a shock to investors including Softbank Vision Fund, Singapore wealth fund Temasek and Ontario Teachers’ Pension Plan, who sunk $400 million into the exchange at a $32 billion valuation in January

VagueMag 4y ago
all these pension plans and retirement funds are sinking tons of money into Tesla stock up here too, you love to see it
peteradio 4y ago
It sounds like a lot, but Ontario Teachers’ Pension Plan commands 200+ billions. Might have made some sense as a strategy.
- origin_path 4y ago
  How many teachers are there in Ontario?!
hahaxdxd123 4y ago
I swear Ontario Teachers' Pension Plan is one of the worst managed funds I've seen. Every time I see buzzy company with little fundamentals, their latest rounds always includes this pension plan. Can someone explain their positions? Like if they want to move along the risk-reward curve, why not just buy fewer bonds and more ETFs? Why enter VC/crypto/etc?
- laluser 4y ago
  I am guessing because they have over 200-250B in assets, they will have some occasional risky bets here and there that seems like a lot, but is only a small percentage of their overall portfolio.
- chollida1 4y ago
  They are one of the best run pension funds in The world. They manage billions, their bc portfolio is a small part of their holdings but it’s been a bit money maker for them.

roughly 4y ago

For context, his remaining fortune is around $1Bn, or the combined net worth of Sundar Pichai and Satya Nadella.

rokob 4y ago
Where are you getting that? Sundar has more than $1B.

seibelj 4y ago

throwup 4y ago

In 2019, FTX tried to attack Binance's futures platform. CZ tweeted about it then: https://twitter.com/cz_binance/status/1173418810918916096 https://twitter.com/cz_binance/status/1173418810918916096 Instead of retaliating, he generously invested in their company. Then waited for years. And when the moment was right, he crushed their business overnight with a single tweet, then swooped in to buy what remained. Check and mate. Do not pick a fight with a billionaire.

usednet 4y ago
More accurately, don’t pick a fight with a real billionaire if you’re a paper billionaire.

m3kw9 4y ago

Hot air fortune

yarg 4y ago

It's crypto, the biggest bubble/ponzi that has ever existed. He never had $16,000,000,000. It's not $16,000,000,000 if you cannot exchange it without the market crashing.

woah 4y ago
Wait then nobody has any money
- rippercushions 4y ago
  Yup, if your "money" is in the form of tokens.
  - _hyn3 4y ago
    (or any other fiat currency, which values are set by their country's central bank instead of backed by bullion reserves)
- colinmhayes 4y ago
  Bezos sells tens of billions of dollars of amazon shares some years.
- lumost 4y ago
  At an abstract level this is true for all capital assets to some extent. The price level correlated with the velocity of exchange for the asset class, if everyone in Boston tried to sell their house tomorrow the market would crash, even though on paper the real estate value of Boston is around 100 billion. On the other end, you can sell 100 billion in treasuries without a problem (fingers-crossed). On a day to day basis the trading volume relative to the size of the asset is minuscule. Economists track money locked into different tiers of static assets as different money supply tiers. M0 is the money that gets used to buy your morning coffee, M4 is things like government bonds and housing. There are different tiers in between for things like your car, an assembly line, or a stock. The reason the rampant money printing of the last decade didn’t effect inflation was due to the money being locked up in the low velocity tiers which have ballooned in size over the last decade. Any event which causes people to liquidate these assets such as war, supply disruption, energy crises, or disease moves inflation higher as the asset battery gets deployed to fight the crises. Biggest historical example of this was the WW2 where all sides had to adopt measures to counter inflation.

joezydeco 4y ago

Does this mean my fortune cookies will go back to normal?

dang 4y ago

Related ongoing thread: Binance to acquire FTX - https://news.ycombinator.com/item?id=33520585 https://news.ycombinator.com/item?id=33520585 - Nov 2022 (550 comments)