For a normal non-tech company, this would be considered beyond over leveraged, in fact no one would have ever lended to them at all. Granted these notes have warrants attached, I’m guessing SVB was involved, but still that’s a lot of debt service for a company with no cash flow.
I work in finance. The “Goldman discount” is well known. People will accept lower comp for that brand on their resume. Otherwise, the places you can really make the most money are at small private firms without public shareholders. There are so many cash machines out there with very little public scrutiny.
You’re making a big bet on equity appreciation though. That’s how the vast majority of very highly paid folks in tech make their money. The consulting jobs pay it in cash.
Devil’s advocate - why? Banks can take your home if you don’t make mortgage payments. With this technology, there might actually be more access to devices because lenders have recourse, reducing the risk overall.
Time being a factor is exactly why you capitalize R&D, which means make it an asset on your balance sheet. The second question is definitely an interesting one however I usually look at businesses more from an outside in view -so it’s not what I think about every day.
What? Sure I can. It’s on the income statement. Then I can show that some firms see more of a return on that R&D spending than others, and that impacts how valuable they are.
It’s the same as how some firms get more return out of spending the same amount on factories as others. They are better factories.
Hi, MBA here, not sure what "training" you're referring to. Certainly nothing I learned in school taught me to focus on quarterly results and ignore R&D. I learned to attempt to push ROIC above WACC in order to ensure firms are generating economic profits, I learned that we probably should capitalize R&D and include it in ROIC to show that it does impact value, among other things
High altitude planes going to the moon is a beautiful analogy. I think this is what I’ll use to explain to less technical friends why I think we’re still many years from self driving cars.
Not sure why raised public attention would reduce credit card usage. People like the convenience, and I don’t see why they would care that it shaves a few basis points off of merchants’ margins. You’ll notice that in transactions with razor thin margins, credit cards aren’t accepted, restaurants being the major exception.
Were we to think about the pro forma AAPL sans the payments, it’d come out of revenue, and then we’d pull 100% of it out of profit, and probably add a bit more of a hit for the inevitable R&D done to start working on their own search.
On the other hand, I feel like modern TV shows aren’t long enough. By that I mean they cover ground too quickly and lack depth. I miss Battlestar Galactica which would hint and lead you on and develop things slowly over years.
The margin on trading is quickly becoming negative so banks think they can absorb them and profit on flow and potentially the asset base. MS needs more assets if they want to start lending.