I think they all operate on the principle of being first for everything is more profitable, including exiting poor investments.
By the time you are talking about, it largely will be.
Google is profitable and trading at a below-market multiple. It's a poor rates play.
Rates directly influence broad-market multiples, which Google will track, but "market goes down and Google goes up...priced in" isn't an intelligent thing to say.
Right.. which is why people should ignore "priced in" comments and instead read them as "I don't know what I'm talking about whatsoever".
There's no such thing as "priced in" - it's a contradiction and only used by people who are religiously inclined to talk about events that are random and don't have an explanation. If someone says "oh that was priced in" that's an extremely clear signal that they do not know what they are talking about.
> Google is profitable and trading at a below-market multiple. It's a poor rates play.
Did you intentionally miss the point or were you genuinely confused about what the discussion was about? It's very clear that I was not providing any sort of analysis about Google and interest rates rising (or lowering) and was talking about how people just say any action is "priced in" once it occurs.
There may be a level of underwriting going on also, as is the case with a rights issue or IPO, but it's probably more the marketing and access to the bank's client base that the spac benefits from.
SPACs are chock full of fees to Wall Street.
When the SPAC goes public, it pays an IPO fee. The bank, having to comply with fewer regulations than in a traditional IPO, makes a healthy profit. When the SPAC negotiates a merger it pays M&A fees. When shareholders are presented with the merger and asked to vote that comes with a fee. If there is a PIPE, there are, of course, more fees.
Later, when the sponsors sell their stock, there will be brokerage fees for the block trade. And I assume, in the final stage of a SPAC’s lifecycle, there will be de-listing, liquidation and/or distressed debt fees.
https://www.forbes.com/sites/jacobwolinsky/2021/12/16/odeys-...
The Federal Reserve bought the shitty mortgage backed securities because they werent that shitty, the banks just had too many of them relative to the size of their own assets.
Even of subprime mortgages and adjustible apr mortgages only ~7% went into default by 2008-2009
A portfolio of mortgages where 93% are going to pay vastly more interest to you than the home is worth and you still have the home if they really default? Thats a good portfolio
The banks issue at the time was that they were leveraged up 50x, and they didnt even realize they were levered up that much
so a single month of 7% defaulting could bankrupt them
While the fed has an infinite sized portfolio without leverage, and bought all the claims and let them just play out which they have continued to do. Theyre profitable, correctly performing investments.
More transparent accounting fixes the problem with re-collateralized re-securitized assets
lol, are these target companies saddled with debt though? I don't think so
Which reminds me OP omitted dilution/share issuance as a mechanism for banker fees.
True, but the margins are wider. Most of the documents are boiler plate. The same investors were buying them in comparable chunks from deal to deal. All this before the boatload of the other fees I mentioned.