That’s also a case for reopening - or better never closing the economy - an abrupt stop and socializing losses will leave scars for decades.
152 karma · joined May 12, 2014
There are very interesting use cases in ‘perspective collaboration’ - as in, ‘do you see what I see?’ Other stellar use cases are how you can prepare for new spaces and new environments. These use cases will sell many units (along with the de facto: gaming).
All this said, I feel the parent comment is correct. The way these companies are approaching the ‘why’ is very ‘it’s like you’re there’ ; ‘look at how connected you are’ ; and some variant.
All is not lost though. There are incredible changes in society if these embodiments (VR, AR, MR, XR) are seen as one of the many user interfaces for the next kind of personal computer. As in, if you change the basic command structure between user and computer - then the next generation PC can take shape.
[Edited: clarity and still terrible]
Honestly, Snap isn’t too far off, but the valley is uncanny.
If one were to simulate every drop of rain, gust of wind, and tidal current of a hurricane, to ultimate perfection, would you say the processor is wet?
This may be what people say now adays (the price going up is the reason for buy backs), but when I went to school and worked on a Convertible Notes desk, the stock price going up is not the reason to issue buy backs - it’s usually because you think your price is so cheap and you can reduce your cost of capital by removing the stock from circulation. The nouveau riche way of doing things is — well we can give you 100% of the cash back now, instead of paying a 5% dividend for x years (x because of compounding / whatever else is your assumption).
[Edit: now that I said this, it sounds a lot like packaging up seemingly derisked assets and marking them as safe (aka CDOs from The Great Financial Crisis (GFC)]
The ETFs are important to understand the full landscape of liquidity - but yes, point taken.
So to your question — in a pure free market, a corporation would tap the shareholder base (like Warren Buffetts cash, like he did in 08) rather than a TARP like agreement. The reason we did TARP was because the engine was seized up (Banks had effectively no funds to lend because a few lost all their assets) — right now it doesn’t look like the engine is seized up (no big hedge funds or banks have blown up [yet I guess]). So really, the company should issue new initial stock back to a Buffet or someone similar at a discount. But the discount is what would make everyone’s portfolio look awful.
So because the government shut everything down - we say... well we made you shut down, so we will take the hit here.
But really the nuance is that, had these airlines not financed buy backs with cheap debt, they could have weathered this storms themselves. These airlines were making so much money they were never thought to be able to lose money again! Matt Levine just put out a great piece on it [0]
So in the free market (and consequence lens), these buy backs financed with debt was a bad business decision - so the natural consequence is to just unwind the transaction, sell back into the market for 80Bn, and restart. Prices would take a serious, serious hit, but the new direct investors would be rewarded with a recovered share price. They would literally be buying the dip.
And just for added info, investors are bailing in these airline stocks because if the gov’t comes in like last time, the shareholders were wiped out first, then the company is allowed to recover. (Fannie and Freddie are still not private... the day that happens, will be a $100Bn transfer from the gov’t to the people)
[0] https://www.bloomberg.com/opinion/articles/2020-03-17/the-go...
If this is a truly capitalistic society - what should really happen is that all the bought back stock needs to be reissued (sold back) into the market — but that would create excess supply, reduce price, then freak out everyone’s 401k.
Finance is a crazy web and really cool - but massively complex. So you are right that there is liquidity every day, but that liquidity does not affect the total number of publicly traded shares until the purchaser is the corporation itself (the buy back).
The real screwed up compounding variable in liquidity is who is actually buying (awesome when it’s actual primary investment aka private fundings and ipos, and messy when it’s the secondary market aka the ticker price) — guess what’s even more messy: Passive Funds like ETFs. Passives (where 401ks live) are now the primary vehicle of investment for average America so really no individual investor is actually buying an individual stock- instead you buy a ‘share’ in a prorated basket of stocks based on ratios set in investor agreements (vanguard ishares etc).
When money goes into the ETF, the fund buys 10% x, 10% y... so on of the basket of stocks they market. No earnings have changed, no cash flows, but external secondary market forces now drive the market.
This is what Michael Barry (of the Big Short) is waiting for next - along with Water, which will be the next decades issue.
Dividends are direct payments to investors who will presumably stay investors — the buy back is a ‘buy out’ of existing shareholders.
There are quite a few more reasons a buy back is different from a dividend - but probably the most interesting bit is this: for a massive company with limited places to compound their retained earnings, by buying back stock the company pays all the dividends it would pay in perpetuity immediately in that instant. This is all fine and sometimes prudent in a net present value equation.... as long as the cash flows remain consistent*
*which is now the issue at hand with Covid-19
Everyone knows the underlying reason, but it's less fearful and more 'we got this, relax.'
(was curious)
[0] https://www.iihs.org/topics/fatality-statistics/detail/state...
The market is a beautiful thing; it will quickly and swiftly tell you if you’re right or not. No need to fret over any apologetic comment.
This is what everything's about. If everyone wrote software, designed boards, worked like this...
Here's what I mean: Apple has always been about bringing computing to the masses. What happens with one person and one computer is Transformational (was never done before, changes society), Platformable (random people build on top of your core product: raw computation, frameworks, etc.), and Valuable to the end user (I now can communicate high bitrate, FaceTime, and low bit rate, twitter, messages real-time, all the time).
Placing Tesla in that same bin doesn't necessarily check the boxes. Tesla's product is personal transportation, and when you look at the three categories above, Tesla is not in the Apple echelon. Tansformational: the Model T was the first and we now have a 5 day work week because of it. Platformable: you can't build directly on top of the driving experience, only entertainment purposes. Consolation: Robotaxi's could allow such platformable-like characteristics - however, the robotaxi platform is discounted as it is not mass platformable as having a Mac, learning Swift, then publishing to millions. Valuable: Tesla's value is in 'a faster horse'... except we call it a 'self-driving car'. Transportation time will not significantly decrease just because the car drives itself. Sure, a faster horse would have been really loved because it was faster (i.e. I no longer have the stress of driving), but when it comes down to it... the core value of transportation is A-B.
The iPhone level change to me is coming with Flying Taxis. The platform side is still out - but as far as transformational and valuable - I see no greater impact on the 2020's than these flying machines.
Question: In the duck hunt video, I don’t see a noticeable “flicker” that’s normally associated with visual bci inputs... were the flapping of the wings the stimulus <> cortex hertz sync?? (Or did they even say??)
If so, dang clever. If there’s no hertz sync, that’s flippin incredible.
Can’t wait for the completely autonomous inputs, without the visual flickery required.
It did a cell phone absolutely right.
- Visual Voicemail; Full internet browser; Music player; Fluid, Threaded SMS conversations; Contacts that looked like contacts ...
For every phone use case, the iPhone delivered a sense of “Finally!”
The Tesla experience had that aura to me when they pitched the battery swap technology — that’s when you said, “holy hell, they nailed it”
However that was dropped, and all other releases have felt lumpy and pumpy. The only thing I believe we all truly love is the acceleration... and really, that wasn’t a “product first” choice, just an attribute of the electric technology.
I really want Tesla to be successful — they just don’t know who they are.
Charging for value can sometimes feel exorbitant... i.e. saving a $100+/hr person ~20 hours a month. Sure I can calculate out it on an excel sheet the customer ROI, but still feels crazy.