3 ms·
Sidebar > which is, in and of itself, insane because FTT worked more like a stock of FTX itself - a company doesn't put its own stock on the asset side of the
by Semaphor 4y ago
Sidebar
> which is, in and of itself, insane because FTT worked more like a stock of FTX itself - a company doesn't put its own stock on the asset side of the balance sheet
Thinking about it, it makes sense. But I never did before. So where does a company’s own stock normally end up at, balance-wise?
- propter_hoc 4y agoBy definition the equity of a business is its assets less its liabilities.
- dragonwriter 4y ago> But I never did before. So where does a company’s own stock normally end up at, balance-wise? The company’s own stock is in the equity section (treasury stock – stock that the company has repurchased after it was issued is a contra equity account, since the act of purchasing reduces stockholder equity.)
- hn_throwaway_99 4y agoOn a balance sheet, assets - liabilities = shareholder equity. This calculated shareholder equity amount is known as a stock's book value, but this can of course differ from its market value: https://www.investopedia.com/ask/answers/how-are-book-value-and-market-value-different/ https://www.investopedia.com/ask/answers/how-are-book-value-...
- guelo 4y agoI've always been confused about this point. In the stock buyback world apparently they just vaporize the stock when it's acquired, they don't hold it on the books because if they need to issue more they can always dilute and create new shares when they need it. Though I would disagree that FTT really functioned equivalently to ownership shares.