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Consider that if I have a bunch of gold bars sitting in a vault somewhere, I don't have to sell them to make money off of them. I can borrow money against their
by skuhn 12y ago
Consider that if I have a bunch of gold bars sitting in a vault somewhere, I don't have to sell them to make money off of them. I can borrow money against their perceived value, currently practically for free.
This becomes particularly interesting if I can buy $100 of gold bars for $50. Even if I can't sell them, I can use them to my advantage.
- imaginenore 12y agoWhere can you possibly borrow $22 billion with stock as the collateral?
- theworst 12y agoAcquisitions with much of the purchase being done in stock. My understanding is that this is very common.
- imaginenore 12y agoEven if your understanding was true, it still supports my original statement - stock is not cash, and you can't easily get much cash for it on the scale of tens of billions.
- theworst 12y agoThe first part of your sentence makes it sound like you strongly disagree with my understanding. Can you elaborate? My point wasn't that you can turn stock into cash, but that you can turn stock into some of the same things that large amounts of cash might be used for -- acquisitions.