All excerpts are humorous and insightful blurbs taken from Matt Levine’s excellent daily lunchtime newsletter. I highly recommend signing up for the free email list.
“That $8 number isn’t quite real — you have to decide how much you value the warrants and reorganized equity — but certainly the equity is getting something. And if you believe, or partly believe, the $8 post-bankruptcy valuation, then $6.25 a year ago was a bargain. If you bought Hertz stock at $6.25 last June, that was a reasonable bet. Not necessarily a great bet — you’re down about 20% over the last year, and of course you’d have been better off buying Dogecoin — but a reasonable one, and if a few more things break your way you’ll have a nice little profit. And if you paid under $3 for Hertz — which is where it traded for most of last June — you did great.”
“See, hacking into companies’ computers and making them useless until you get a Bitcoin ransom is a crime, but it’s a crime that has a legal infrastructure built up around it. You do the crime, a legal ransomware negotiation firm sends you the money, it all runs on well-maintained tracks. But you move your servers to Iran, and you implicate a whole different legal regime: Sure sure sure U.S. companies can pay ransoms to Russian crime syndicates, no problem, but doing business with Iran — even in the form of sending money to Russian crime syndicates with servers in Iran — is a whole different kind of illegal. Nobody can do business with you — even criminal business — if it would violate U.S. sanctions on Iran. Doing ransomware is a matter of standard business crime; sending payments to Iran is a matter of U.S. national security. You don’t want that.”
“1. Tesla Inc. buys some Bitcoin.
2. Tesla announces that Bitcoin is good now and that it bought some.
3. The price of Bitcoin goes up, because institutional adoption of Bitcoin is good for its price, but also because, by the Elon Markets Hypothesis, anything that Musk buys goes up.
4. Tesla sells some Bitcoin, making a profit.
5. Musk tweets that the price of Bitcoin is too high.
6. Bitcoin prices go down due to the Elon Markets Hypothesis.
7. Go to Step 1.”“Hertz Global Holdings Inc. filed for bankruptcy last May, in the depths of the global pandemic, in large part because it got, effectively, a margin call on its fleet of cars. The value of used cars collapsed last spring, the lenders who financed Hertz’s cars had the right to demand more collateral, they did, Hertz couldn’t come up with the money, so it filed for bankruptcy. But then business slowly started recovering, and used-car prices recovered strongly and more or less immediately. And now there is a bidding war for the company. Turns out Hertz was solvent, the people who bought it on Robinhood after it filed for bankruptcy were right, and the people who made fun of them — very much including me — were wrong.”
“I feel like you get a lot less of this “the future of democracy is on the blockchain” stuff than you did a few years ago, but I guess it takes time to get a whole city together. I hope it works, and he gets his city, and people move there, and they do whatever they’re gonna do on the blockchain, but this all happens like 10 years from now when “blockchain will replace government” has become a quaint forgotten notion, and the town becomes a sort of old-timey tourist attraction, like Colonial Williamsburg, where people will make day trips from Las Vegas to gawk at reenactors in 2010s clothes doing blockchain things. “Daddy why is she holding her phone up to that banana?” “Son, she’s scanning a QR code to tap into the blockchain to see if the banana is organic.” “But daddy isn’t there a sticker on it that says ‘ORGANIC’?” “Yes, but back before sticker technology was developed people used QR codes on the blockchain.” “Ooh that sounds like a lot of work.” “It was, son, it was; life was hard back in the blockchain era.””