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Robinhood to buy back Bankman-Fried’s stake for $605M from U.S. government
- maerF0x0 3y agoThe article is scant on details, so its unclear what the money would be used for... But why should the Government get a $605M payday for appropriating privately held assets? That sets up a dark conflict of interest.
- my123 3y agoIt's not a payday for the government. This money will be returned to creditors as part of the bankruptcy process.
- maerF0x0 3y agoPerhaps, but the posted does not say that...
- burnte 3y agoIt also doesn't say that the shares were paid for with wire transaction as opposed to physical cash in stacks of $100 bill, but that also is what happened. They're not going to explain the common bit in every story, only the unique bits. Whenever the gov't sells things in a bankruptcy or fraud proceeding, the money goes to the creditors/victims, and then fines.
- whateverman23 3y ago> Perhaps, but the posted does not say that... It doesn't say the government is profiting either. You just made that up.
- maerF0x0 3y agoWell, that piece is pretty easy to conclude. They acquired it for essentially nothing.
- meepmorp 3y ago> Well, that piece is pretty easy to conclude. It's also an incorrect conclusion.
- pgwhalen 3y agoYou are missing a very obvious piece of the puzzle here: assets seized by the government during bankruptcy get used to offset liabilities of the bankrupt company. This doesn't need to be explicitly said; it wouldn't make sense for it to work any other way.
- RC_ITR 3y agoI think too many people got used to crypto’s “well if the software says it…” mortal/legal/ethical code. They assume that traditional finance isn’t a thoughtfully designed system with checks and balances because they were blindly railing against it before.
- junofan 3y agoHaven’t FTX’s bankruptcy lawyers already billed $200m? That’s money that isn’t going to FTX’s creditors. Sure, people have scammed larger sums, but I wouldn’t conclude the traditional financial system is thoughtfully designed with checks and balances while lawyers are making hundreds of millions processing bankruptcy transactions. There’s gotta be room for improvement along the moral/legal/ethical dimensions for our current system.
- martin8412 3y agoIt takes a lot of effort to unravel such a huge mess. It's impossible to do cheap. The corporate structure has more than 100 legal entities around the globe intentionally designed to obfuscate what's going on. So you need domain experts in each country along with experts on unraveling the structure. In the end, for this particular company, it doesn't matter. The IRS has filed a claim for $30B+ in unpaid taxes. There's nothing left for creditors.
- junofan 3y agoSome of the publicly available billables are outrageous though. 100 entities is pretty common.
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- freejazz 3y agoBecause they declared bankruptcy - that's how bankruptcy works. You declare bankruptcy, the gov't puts someone in charge of managing the sale of your assets in order to reimburse your creditors.
- troupe 3y agoDoes anyone know how much Bankman-Fried's company paid for those shares? Does this represent a good deal for Robinhood, or are they paying a premium to get them back?
- ksherlock 3y agoThe SEC filing where SBF disclosed his stake was May 2, 2022. There was a noticeable HOOD volume increase on April 27-28-29 so let's assume that's when they were purchased. The range for that time period was $9.00-10.79/share. However, that was on the open market so Robin Hood's proceeds were $0.00. The robin hood IPO was at $38/share which is more than $10.96 a share so in that sense it's a good deal for them. https://www.sec.gov/Archives/edgar/data/1783879/000114036122018827/brhc10037465_sc13d.htm https://www.sec.gov/Archives/edgar/data/1783879/000114036122...
- xnx 3y agoShares were sold at $10.96, a ~2% discount to the current $11.18 share price. Was the US not able to sell these shares on the open market because it would tank the price and value of the shares? Edit: Facepalm. 2% not 20%
- Frummy 3y agoThat's 2%
- christiangenco 3y ago`(11.18-10.96)/11.18=0.0196779964` That checks out. A 20% discount would've been `11.18-0.2*11.18=8.944`.
- pgwhalen 3y agoNever mind the incorrect math, you have a timing problem: you looked at the price this morning after reading the news about it, but the deal was effectively done overnight. Yesterday's closing price for the stock was $10.89.
- jmartrican 3y agoDoes the US gov make a profit on the deal? Does some or all of the proceeds go to pay back victims?
- belltaco 3y agoThe govt didn't buy the shares, they seized them. So it's all technically profit but they probably want to reimburse the scammed folks.
- benjaminwootton 3y agoAs of today, SBF hasn’t been found guilty in any court of law. Are the government typically allowed to seize and sell your assets and possibly redistribute the proceeds before you’ve even been to court? What if he needed those funds for his legal defence?
- edmundsauto 3y ago> Are the government typically allowed to seize and sell your assets and possibly redistribute the proceeds before you’ve even been to court? Yes, asset seizure is the norm for law enforcement in America. > What if he needed those funds for his legal defence? The money is in a limbo state, as it might be proceeds from crimes. The justice system doesn't want you using proceeds from crimes in any way, shape or form.
- JumpCrisscross 3y ago> asset seizure is the norm for law enforcement in America Freeze and seizure, sure. Pre-trial disposal, no. In this case, the headline is being loose in that these aren't Bankman-Fried the natural person's shares, they're a bankrupt entity's. Selling a bankrupt entity's stuff is par for the course.
- edmundsauto 3y agoIs that true when the entity itself is fraudulent? At what point can we separate SBF & Co's fraud from the company itself?
- exabrial 3y agoAre people actually using Robinhood for anything serious? Personally, if something goes wrong with my money, there needs to be someone on a phone line somewhere to call. I don't understand why anyone would settle for _nonexistant_ customer service.
- cyanydeez 3y agoIt's basically a gambling app as proven by GameStop
- quags 3y agoMy auto investment is in vanguard which is the bulk of it and I have Robinhood for random day trading. I’ve never needed to call or needed support from either. I trust vanguard more but Robinhoods mobile app is better than vanguard. Both have their purpose.
- satvikpendem 3y agoI use it to auto buy stocks every month. Although M1 Finance is often better.
- CameronNemo 3y agoRobinHood does have phone based support.