4 ms·

Do you have any examples of this? A corporation that owns literally nothing, whose entire value is based on something speculative (like a drug patent), and who

Do you have any examples of this? A corporation that owns literally nothing, whose entire value is based on something speculative (like a drug patent), and who has a traded security?

junofan 4y ago
SPACs are just pieces of paper sitting in Delaware somewhere.
- dataflow 4y ago
  Don't they raise money? Meaning that money is part of (or all of) their assets?
  - codehalo 4y ago
    You are really struggling with this eh?
Aloha 4y ago
IP is a tangible asset, one that can even be given a value before proven.
- dataflow 4y ago
  That has nothing to do with what I'm saying. If you invest in a company that "only" has IP, your invested cash itself is still part of the company's assets, so it's not like you're buying shares of vacuum. If the company liquidates itself - you get back your proportion of the company's assets. The situation is not the same with Bitcoin.
  - Aloha 4y ago
    That was my point more or less, is that Bitcoin is a publicly traded fiat currency.
    - dataflow 4y ago
      Yeah, it certainly has similarities to an unbacked currency. I wouldn't personally call it "fiat" currency (unless you think El Salvador making it legal tender makes the difference here), just some sort of unbacked digital currency. The IRS's characterization of it as a virtual currency seems like an accurate description to me (as I'm guessing it is to you) - and the SEC refusing to consider it a security also makes sense to me (for all the above reasons I've been trying to explain to the others here).
      - Aloha 4y ago
        "By arbitrary decree" was the meaning I meant. Someone declared it to be a currency, it need not be a government doing the declaring. But yeah, we're basically in agreement, that's the underlying problem with crypto, it's a fiat currency (no intrinsic value) traded like it's a security (which usually has some even if very abstract, intrinsic value).
lmm 4y ago
Getting to exactly $0.00 in the company bank account probably requires an improbable level of fine-tuning (if only because you need enough to file your annual registration statement or whatever), but ISTR Retrophin was down to something like $3.15 + some valuable drug patents at one point in its penny-stock days.
- dataflow 4y ago
  Again, the bank account balance is not the point of what I'm saying. See the sibling comment I replied to: https://news.ycombinator.com/item?id=35270550 https://news.ycombinator.com/item?id=35270550
  - lmm 4y ago
    Where do you think invested cash goes if not the company bank account? When you invest in a company, they get some cash and you get a claim on the company. If they then spend all that cash on buying drug patents, marketing, filing registration statements etc., then your shares are no longer backed by cash. The cash has been spent!
    - dataflow 4y ago
      Er, I've been saying it does go into the company bank account (which you own a share of), unlike with Bitcoin. Please re-read my comments. You're turning what I said 180 degrees on its head.
      - lmm 4y ago
        > Er, I've been saying it does go into the company bank account (which you own a share of), unlike with Bitcoin. Sure. But it can then be spent by the company, and that doesn't (necessarily) destroy the company's value. Valuation isn't about physical assets. > Please re-read my comments. I did, they said exactly what I thought they did. Maybe you should re-read mine, or write yours more clearly, or think through what you're saying a bit more.

Do you have any examples of this? A corporation that owns literally nothing, whose entire value is based on something speculative (like a drug patent), and who has a traded security?

junofan 4y ago

SPACs are just pieces of paper sitting in Delaware somewhere.

dataflow 4y ago
Don't they raise money? Meaning that money is part of (or all of) their assets?
- codehalo 4y ago
  You are really struggling with this eh?

Aloha 4y ago

IP is a tangible asset, one that can even be given a value before proven.

dataflow 4y ago
That has nothing to do with what I'm saying. If you invest in a company that "only" has IP, your invested cash itself is still part of the company's assets, so it's not like you're buying shares of vacuum. If the company liquidates itself - you get back your proportion of the company's assets. The situation is not the same with Bitcoin.
- Aloha 4y ago
  That was my point more or less, is that Bitcoin is a publicly traded fiat currency.
  - dataflow 4y ago
    Yeah, it certainly has similarities to an unbacked currency. I wouldn't personally call it "fiat" currency (unless you think El Salvador making it legal tender makes the difference here), just some sort of unbacked digital currency. The IRS's characterization of it as a virtual currency seems like an accurate description to me (as I'm guessing it is to you) - and the SEC refusing to consider it a security also makes sense to me (for all the above reasons I've been trying to explain to the others here).
    - Aloha 4y ago
      "By arbitrary decree" was the meaning I meant. Someone declared it to be a currency, it need not be a government doing the declaring. But yeah, we're basically in agreement, that's the underlying problem with crypto, it's a fiat currency (no intrinsic value) traded like it's a security (which usually has some even if very abstract, intrinsic value).

lmm 4y ago

Getting to exactly $0.00 in the company bank account probably requires an improbable level of fine-tuning (if only because you need enough to file your annual registration statement or whatever), but ISTR Retrophin was down to something like $3.15 + some valuable drug patents at one point in its penny-stock days.

dataflow 4y ago
Again, the bank account balance is not the point of what I'm saying. See the sibling comment I replied to: https://news.ycombinator.com/item?id=35270550 https://news.ycombinator.com/item?id=35270550
- lmm 4y ago
  Where do you think invested cash goes if not the company bank account? When you invest in a company, they get some cash and you get a claim on the company. If they then spend all that cash on buying drug patents, marketing, filing registration statements etc., then your shares are no longer backed by cash. The cash has been spent!
  - dataflow 4y ago
    Er, I've been saying it does go into the company bank account (which you own a share of), unlike with Bitcoin. Please re-read my comments. You're turning what I said 180 degrees on its head.
    - lmm 4y ago
      > Er, I've been saying it does go into the company bank account (which you own a share of), unlike with Bitcoin. Sure. But it can then be spent by the company, and that doesn't (necessarily) destroy the company's value. Valuation isn't about physical assets. > Please re-read my comments. I did, they said exactly what I thought they did. Maybe you should re-read mine, or write yours more clearly, or think through what you're saying a bit more.