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The people that sold their stakes to people like Scott Galloway must be kicking themselves. Great trade. https://www.youtube.com/watch?v=TPFiRlZaclQ https://ww

The people that sold their stakes to people like Scott Galloway must be kicking themselves. Great trade. https://www.youtube.com/watch?v=TPFiRlZaclQ https://www.youtube.com/watch?v=TPFiRlZaclQ

ignoramous 2y ago
Galloway says he bought $1mn claim for $270k. That's a nice ~4.5x profit.
- fsckboy 2y ago
  looking at individual investments is fallacious, need to look always at your entire portfolio (i.e. not just winning lottery tickets)
  - arder 2y ago
    While that's true, if you have a good understanding of bankruptcy law, and a reasonable understanding of what assets FTX owned you could make a reasonable guess of how much money the eventual bankruptcy would pay out. Since the administrators publicly published what assets there were quite early on I think it's fair to say $270k always looked like a good deal.
Scoundreller 2y ago
Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third: > “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “ Those were some expensive words. And in general, always somewhat expensive words because the hedge fund buyers generally don't work "lose" into their models. https://www.miamiherald.com/news/local/community/miami-dade/article274981761.html https://www.miamiherald.com/news/local/community/miami-dade/... Selling your claim is only a good deal if the hedge funds are drunkenly stupid, you have no other assets/lending sources and are going to die soon or have debt at payday loan rates.
- ipsento606 2y ago
  Selling your claim, or a portion of your claim, might also make sense from a risk tolerance / declining marginal utility of money point of view, if it represented a large enough portion of your net worth. Or put another way - if there were an investment opportunity that that had an 80% chance of 3x-4x returns in the next 2-3 years, I might consider investing 25% or even 50% of my net worth in that opportunity. But I certainly wouldn't invest 95% of my net worth.
- deleted 2y ago
  [deleted]
- flomo 2y ago
  [flagged]
  - nroets 2y ago
    The buyers of these claims often have inside information. By selling during bankruptcy they gambled that the "experts" were wrong and it turn out not to be the case. That's why exchanges often suspend shares during bankruptcy: To make it clear that price manipulation and outright corruption is likely. I have both a claim in FTX and shares in a suspended ("bankrupt") company listed outside the US. I just ride these things out because I don't need the money right now.
    - deleted 2y ago
      [deleted]
    - flomo 2y ago
      [flagged]
  - Scoundreller 2y ago
    From a public policy standpoint, you don't want local government authorities taking a quick buck now instead of (on average) more money a few years later. But to an elected politician that might not even be in office in a few years, money now is worth more at any cost than money later. A gov agency is best suited to ride these things out because their cost of capital is among the lowest. Generally dumb for a county to sell an asset to a hedge fund: the HF has to pay more in interest than a county does just to pay you money now. There's nothing to do here except wait, nothing to whip in shape and make more profitable. (Also cities shouldn't own stadiums, that's a gamble on the success of your local sports team and solvency of whomever you sell the naming rights to)
paulpauper 2y ago
Yeah, SBF was not lying about FTX having the money. It was not totally worthless as many had assumed. it shows how someone can be dishonest in some ways but honest in others. I too thought he was telling the truth. Had FTX not had money, he would have just shut up. I think such a long sentence may have been a miscarriage of justice in this regard.
- Nursie 2y ago
  > Yeah, SBF was not lying about FTX having the money. Yes, he was. The reason people are being made whole now is that a couple of years down the line, some of his investments and acquisitions are now worth considerably more than they were at the time of bankruptcy. But at that point t FTX was insolvent and SBF was telling lies all over the place.
  - paulpauper 2y ago
    as early as Jan 2023, before bitcoin had appreciated, $5 billion had already been recovered https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-ftx-has-recouped-over-5-billion-in-liquid-assets-but-still-has-billions-more-to-go-to-meet-liabilities/ https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-f... Anthropic was another $1 billion
    - Nursie 2y ago
      Even that article says the assets there are not enough to come close to liabilities. FTX was insolvent at that time.
      - paulpauper 2y ago
        It did not help that CZ triggered a run on the assets at the worst time; otherwise it likely would have been fine. When FTX ran out of money, every depositor instantly became a creditor. I doubt this is unique to FTX. many exchanges may have some shortfall between deposits and credits.

The people that sold their stakes to people like Scott Galloway must be kicking themselves. Great trade. https://www.youtube.com/watch?v=TPFiRlZaclQ https://www.youtube.com/watch?v=TPFiRlZaclQ

ignoramous 2y ago

Galloway says he bought $1mn claim for $270k. That's a nice ~4.5x profit.

fsckboy 2y ago
looking at individual investments is fallacious, need to look always at your entire portfolio (i.e. not just winning lottery tickets)
- arder 2y ago
  While that's true, if you have a good understanding of bankruptcy law, and a reasonable understanding of what assets FTX owned you could make a reasonable guess of how much money the eventual bankruptcy would pay out. Since the administrators publicly published what assets there were quite early on I think it's fair to say $270k always looked like a good deal.

Scoundreller 2y ago

Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third: > “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “ Those were some expensive words. And in general, always somewhat expensive words because the hedge fund buyers generally don't work "lose" into their models. https://www.miamiherald.com/news/local/community/miami-dade/article274981761.html https://www.miamiherald.com/news/local/community/miami-dade/... Selling your claim is only a good deal if the hedge funds are drunkenly stupid, you have no other assets/lending sources and are going to die soon or have debt at payday loan rates.

ipsento606 2y ago
Selling your claim, or a portion of your claim, might also make sense from a risk tolerance / declining marginal utility of money point of view, if it represented a large enough portion of your net worth. Or put another way - if there were an investment opportunity that that had an 80% chance of 3x-4x returns in the next 2-3 years, I might consider investing 25% or even 50% of my net worth in that opportunity. But I certainly wouldn't invest 95% of my net worth.
deleted 2y ago
[deleted]
flomo 2y ago
[flagged]
- nroets 2y ago
  The buyers of these claims often have inside information. By selling during bankruptcy they gambled that the "experts" were wrong and it turn out not to be the case. That's why exchanges often suspend shares during bankruptcy: To make it clear that price manipulation and outright corruption is likely. I have both a claim in FTX and shares in a suspended ("bankrupt") company listed outside the US. I just ride these things out because I don't need the money right now.
  - deleted 2y ago
    [deleted]
  - flomo 2y ago
    [flagged]
- Scoundreller 2y ago
  From a public policy standpoint, you don't want local government authorities taking a quick buck now instead of (on average) more money a few years later. But to an elected politician that might not even be in office in a few years, money now is worth more at any cost than money later. A gov agency is best suited to ride these things out because their cost of capital is among the lowest. Generally dumb for a county to sell an asset to a hedge fund: the HF has to pay more in interest than a county does just to pay you money now. There's nothing to do here except wait, nothing to whip in shape and make more profitable. (Also cities shouldn't own stadiums, that's a gamble on the success of your local sports team and solvency of whomever you sell the naming rights to)

paulpauper 2y ago

Yeah, SBF was not lying about FTX having the money. It was not totally worthless as many had assumed. it shows how someone can be dishonest in some ways but honest in others. I too thought he was telling the truth. Had FTX not had money, he would have just shut up. I think such a long sentence may have been a miscarriage of justice in this regard.

Nursie 2y ago
> Yeah, SBF was not lying about FTX having the money. Yes, he was. The reason people are being made whole now is that a couple of years down the line, some of his investments and acquisitions are now worth considerably more than they were at the time of bankruptcy. But at that point t FTX was insolvent and SBF was telling lies all over the place.
- paulpauper 2y ago
  as early as Jan 2023, before bitcoin had appreciated, $5 billion had already been recovered https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-ftx-has-recouped-over-5-billion-in-liquid-assets-but-still-has-billions-more-to-go-to-meet-liabilities/ https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-f... Anthropic was another $1 billion
  - Nursie 2y ago
    Even that article says the assets there are not enough to come close to liabilities. FTX was insolvent at that time.
    - paulpauper 2y ago
      It did not help that CZ triggered a run on the assets at the worst time; otherwise it likely would have been fine. When FTX ran out of money, every depositor instantly became a creditor. I doubt this is unique to FTX. many exchanges may have some shortfall between deposits and credits.