Goldman Sachs lost $1.2B in 2022 mostly because of Apple Card | Hacker News Reader

Goldman Sachs lost $1.2B in 2022 mostly because of Apple Card

appleinsider.com

34 pointsredbell29 comments

It’s a really tough existence being an Apple supplier! Goldman just learned that too.

Even the best and brightest finance killers succumb to Tim Cook’s honeydicking enchantments, he’s been doing that for more than 2 decades.

Not for Chinese suppliers.

Imagine being a billionaire and still being afraid to speak out about oppression because you would lose money.

https://twitter.com/alx/status/1598473176102600704

What is depicted in the video looks more like a dumb ambush to me. They should have lured him in with questions they knew would give him a chance to put Apple in a positive light. Sales figures, quarterly results, and such.

Then when he’s comfortable come with the hard questions.

But anyway, I think it’s still an ambush and unfair.

In any environment, there hasn’t been a case when he stood up for human rights when there are monetary consequences.

Looks shameful from the outside. When I see them celebrating Martin Luther King on their startpage, my assumption is, it’s there because Tim said so. But when they are not allowed to talk openly about what it is they actually do to be true to their values, it looks like hypocrisy.

Is there anything positive that can be said about Apple’s involvement in China? What’s with the ending of rural poverty in China? Is Apple any stopgap factor in the conflict between China, Taiwan, and the USA? Like, you know, we as China have to be careful not to start a war with Taiwan so that we can continue producing for Apple.

Apple Card feels like a strategic failure from Goldman’s side. If it had come 5 years earlier, it may have had more adoption. But now cards with better benefits are easily obtainable elsewhere.

I wonder how many potential customers they lost with their rather shoddy credit scoring

I have a 770 credit score on experian and I was rejected for the Apple Card

Time doesn’t matter, the Apple Card was just a small part of Goldman’s strategy to enter the retail banking business and that is working out just as good as the Apple adventure.

I do not know about that:

https://www.semafor.com/article/12/22/2022/goldmans-misadven...

> Goldman is now winding down its personal-loan business, called Marcus, for Goldman’s 19th-century founder, who peddled short-term loans to merchants along Manhattan’s wharfs. The firm will stop making new loans, Reuters previously reported and Semafor confirms, and is weighing a sale of the loans that remain on its books, people familiar with the matter said.

>It is also abandoning a plan to launch Marcus checking accounts, after four years of work and nearly $100 million dollars spent, people familiar with the matter sa

>spent roughly $350 to acquire every new Apple Card customer

Shouldn't most of them be free from apple. This makes no sense to me.

Well presumably they give money to Apple. That could have been structured as a lump sum putting costs up front. Plus you've got marketing and stuff. Then youve potentially got referral fees for 3rd parties, and perhaps introductory bonuses/gifts/cashback that could be treated as a cost of acquisition

If the fixed costs arent amortized over enough customers it can build up.

That's high, but not crazy. Banks spend serious amounts on customer acquisition for credit products. For a normal card holder, spending $200 in acquisition costs (marketing, referral fees, free "points" etc all added together) is not a strange number in the industry.

In ~2016/2017, Chase paid people $1,500 to sign up for their Chase Sapphire Reserve credit card. I do not believe any bank has offered anywhere near as high of a sign up bonus since.

Infra/advertising spend divided by number of acquired customers.

It’s incredible. Apple causes a big bank to lose money because they introduce a product where they can’t use their typical money grabbing tricks like extortionate fees and interest.

How does this site, where the commenters always pretend to be against big money, react? Hurr durr Apple bad.

Apple and Goldman is not a David and Goliath story. It's more like the Ice Giants fighting it out with The Gods about when they borrowed the lawnmower (to borrow a phrase from Terry Pratchett). There's little we mortals can do against these forces that move heaven and earth.

Apple has 20x the market cap, 5x the profit as Goldman, and almost the same profit margin. Relatively speaking, Apple has been able to move a lot more heaven and earth than Goldman for a long time now.

Apple produces iPhones, Goldman Sachs does financial engineering - its Asset Management division, in addition to $1.5T of their own assets, also manages $2.5T of customer's money. If necessary they can use those assets to further their agenda (by investing them in specific industries or companies). That gives them a lot more influence than Apple, which has to use their own cash for everything. That's why they had audacity to say they are doing "God's work" :)

I have an Apple Card and it’s my only credit card. I like the integration with the app and the support when I’ve needed it and I think min/maxing for points or rewards is stupid. It’s why I don’t have any Chase or AMEX cards.

It’s a bummer I seem to be an outlier. I was hoping more people were like me and this would maybe change the credit card industry a bit.

I have always wondered; is there a limit to the extent of losses these financial companies keep enduring? Every time Wells Fargo is in the news, it is about some loss or fine to the tune of hundreds of millions of dollars.

The limit is shareholder patience. There is no numeric limit

So either it needs to make strategic sense in the shareholders mind or the loss number needs to be deemed reasonable in the context of business size. Reasonable there is again shareholder subjective

Probably a payment plan on the fines.

Stop making homophobic and transphobic posts.

https://news.ycombinator.com/item?id=34402242

Too big to fail.

Wells Fargo still reliably earns its shareholders $20B in profits, outside of 2020.

https://www.macrotrends.net/stocks/charts/WFC/wells-fargo/ne...

But its shares have lost value relative to shares of its competitors, Chase and Bank of America. They are still at 2012 market cap, while Chase and Bank of America have made huge increases. M

BofA had huge increases mostly through expansion of BofA credit cards for states' unemployment checks.

Now even that is shrinking due to competition (and fewer unemployment).

Unemployment benefits come on debit cards, which earn very little profit since debit card fees are legally capped and very low. BoA has been on a steady march upward since 2010:

https://www.macrotrends.net/stocks/charts/BAC/bank-of-americ...

https://www.ftc.gov/business-guidance/resources/new-rules-el...

> Beginning October 1, 2011, interchange fees for certain debit cards are capped at 21 cents plus 0.05% of the transaction value. If the issuer meets specific fraud prevention standards, the fee may go up a penny. The cap applies only to large issuers — banks and other card issuers with $10 billion or more in assets (including assets of affiliates).

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