Nathan’s post is not entirely wrong though. If FTX.com sells at a discount, we have no idea who gets paid first. Maybe it takes FTX to sell and lose 50% of its value for SBF to get zero, maybe it takes 90% discount, maybe 99%?
This happens a lot when there are aqui-hires because of start-up going bankrupt, and employees with shares get 0 because investors have prefered payback clauses
I agree we have no idea what the terms of the deal are, which is why I don’t think we can say what the total effects on SBF’s assets are other than by informed guessing.
Not only we have no idea of the terms of the deal for FTX.com, but it seems hard to predict what it means for the value of FTX US (what does the probability of another bank run look like now?) and Almeda (did they actually use FTX.com’s info/cash as a significant generator of alpha?)
Nathan’s post is not entirely wrong though. If FTX.com sells at a discount, we have no idea who gets paid first. Maybe it takes FTX to sell and lose 50% of its value for SBF to get zero, maybe it takes 90% discount, maybe 99%?
This happens a lot when there are aqui-hires because of start-up going bankrupt, and employees with shares get 0 because investors have prefered payback clauses
I agree we have no idea what the terms of the deal are, which is why I don’t think we can say what the total effects on SBF’s assets are other than by informed guessing.
Not only we have no idea of the terms of the deal for FTX.com, but it seems hard to predict what it means for the value of FTX US (what does the probability of another bank run look like now?) and Almeda (did they actually use FTX.com’s info/cash as a significant generator of alpha?)
It’s almost certain that the residual value after FTX.com’s sale will be very low.
There are also major implications for Alameda trading and the remaining FTX entities.