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It's not hair-splitting, a SPAC is simply not a Ponzi scheme. That doesn't mean it's a good investment.
by epgui 3y ago
It's not hair-splitting, a SPAC is simply not a Ponzi scheme. That doesn't mean it's a good investment.
- mlyle 3y agoSPACs may not always be ponzi schemes, but plenty are of dubious, unvetted businesses and for the principle purpose of paying returns to prior investors.
- epgui 3y agoYes, but that's only superficially similar to a Ponzi scheme. They're just not Ponzi schemes.
- deleted 3y ago[deleted]
- iancmceachern 3y agoHow so? I'm genuinely curious, what are the specific distinctions? Many others consider it so: "Holmes duped just about everyone about the efficacy of Edison. For 12 years, she essentially ran a Ponzi scheme by attracting millions of dollars from primarily venture capitalists that saw it as a unique opportunity to cash in on the boom in Silicon Valley." https://www.ethicssage.com/2022/01/fake-it-until-you-make-it-the-story-of-elizabeth-holmes-and-theranos.html https://www.ethicssage.com/2022/01/fake-it-until-you-make-it...
- deleted 3y ago[deleted]
- throwawaymaths 3y agoI lot of legitimate businesses fall into that category. Also illegitimate businesss. Theranos was definitely illegitimate (and had the characteristic of little fish investors trying to sell to bigger fish), but it would be a pretty severe category error to call it a ponzi scheme.
- iancmceachern 3y agoI dont agree, many others consider what she did no different than a ponzi scheme. It's not just me and the patent commenter: "Holmes duped just about everyone about the efficacy of Edison. For 12 years, she essentially ran a Ponzi scheme by attracting millions of dollars from primarily venture capitalists that saw it as a unique opportunity to cash in on the boom in Silicon Valley." https://www.ethicssage.com/2022/01/fake-it-until-you-make-it-the-story-of-elizabeth-holmes-and-theranos.html https://www.ethicssage.com/2022/01/fake-it-until-you-make-it... I would appreciate, for my own edification, what specific things you believe are different between what Ms Holmes did and what Maydoff or Ponzi did. I'm genuinely curious.
- throwawaymaths 3y agoTheranos was fraud. She made material lies about what the machines do. Ponzis are accounting malpractice that don't even necessarily involve defrauding anyone. It's a problem if you're going to call everything that goes south a ponzi scheme, because it elides failure modes and dulls peoples ability to distingush and analyze bad situations. Is social security, for example, a ponzi scheme?
- iancmceachern 3y agoDidn't Ponzi make material lies about what his company did also? It just seems like a dubious distinction. More than what they did being different, I think the laws and terminology around those laws are different now. I don't think there is much pragmatic difference, mostly just semantics no?
- danielmarkbruce 3y agoThere is a meaningful difference. A ponzi scheme involves: schemer takes money from Mr. A. At a later date he takes money from Mr B. He gives some of the money from Mr. B to Mr A, and tells Mr. A that it's "returns". He tells Mr B. all is fine. Then Mr C comes along and his money is given to Mr. A and Mr. B, as "returns". This continues. It's a very specific type of fraud. Most fraud isn't a ponzi, just like every injury isn't a broken arm. It's silly to go around calling all injuries a broken arm.