I work in markets. No, you cannot just fail to deliver. I'm also not sure how the ETF thing would work. If it's 1% of the ETF you're going to hedge out the position using a giant notional. It doesn't work.
Official SEC document regarding regulation SHO describes both illegal and legal cases when you can "just" fail to deliver [0]. Market makers which also happen to have hedge-fund branches are having the most flexibility in this.
It amazes me that a fourteen year old company with a mature business model requires equity financing. I'll never really understand how tech companies work, I guess.
That's mostly because they DO NOT have a mature business model. Reddit struggles because their main source of revenue, ads, performs poorly on the generally tech savvy audience that makes up the core of their platform. They have been trying to figure out for literally the entire life of the company how to turn a top 10 visited website into actual consistent and repeatable revenue. You'd think it be pretty simple but look how much push back they've gotten on even relatively benign monetization strategies.
I could purchase my car out right with cash, but since the interest rate was super low, there was no harm in financing it.
Similarly, if you can use someone else's money to grow your business, and the terms are quite favorable to you, why wouldn't you?
More likely in Peleton's case, they make profit, but it takes a lot of money to expand.
I also wonder how big the market is for $2000 exercise bikes/treadmills + subscription service... especially when consumer debt is already at a high. Maybe they are thinking gyms/apartment fitness centers will buy them?
+1 for Atlanta and The Wire as eye-opening depictions of daily life in poverty. But even in TV, these examples are the exception to the rule, sadly. The only other successful show I can think of is Rosanne, which means we're averaging about one a decade.
I'm genuinely fascinated by this comment. You're saying that mutuals offer lower prices (not typically true), but they were out-competed by private companies? I'm not sure that makes sense. In my sector (life insurance), there's no real pattern to mutual vs public company pricing, but maybe it's different in auto insurance, for instance.
It goes beyond pricing. Mutual insurance policy owners were paid dividends based on principle investment. Berkshire pays dividends to shareholders, i.e. Warren Buffet, while policy holders get nothing but insurance coverage.
Buffet decoupled investments from insurance, because he thought (IMO rightly) they should be different products. And his companies only win to the degree that consumers choose them.
Consumers don't as a group "choose" anything independently in the sense that their biases and psychological faults and the structure of incentives in our society are all used to make consumers act against their own interests and the interests of the whole. When our "best and brightest" are only committed to profit, we cannibalize ourselves. It isn't progressive. There is no scenario where shitting on the masses to help yourself results in a win for humankind. Not at this stage in history.
Not only has Berkshire never paid dividends, as another comment noted, Buffett decided three decades ago to give all of his wealth away to the benefit of less fortunate people.
In the abstract, giving away the proceeds to a cause you support isn't really a tremendous excuse for bad behavior.
I'm not evaluating Buffett either way with that statement, just pointing out that it is possible and probably necessary to evaluate his behavior without giving consideration to his pledge.
I was wrong, replace dividends with stock buybacks and buying up other companies, it's the same impact on the policy holder, who will still see no financial gain from holding the policy. Did you consider that some of those less fortunate people that he donates to might be less fortunate because they've been paying into an insurance system that for 40+ years years has provided them no return?
If you want an investment you can invest, if you want insurance you can get insurance. I'm not sure why you think overpaying for insurance and getting a dividend back sounds like a great way to do both. If you pay for insurance for 40+ years you certainly got something out of it--you have been insured for 40+ years!
>> If you want an investment you can invest, if you want insurance you can get insurance.
Most people used to do both at the same time and it seemed to work pretty well before Buffett came along. And there's a good analogy to your last point - someone who rents an apartment for 40 years when they could have bought an equivalently valued home two times over. They shouldn't complain when they die with a net worth of zero, they had a roof over their head for 40 years!
Also, mutual policy holders don't "overpay" for insurance as all dividends are returned to them. Only a private insurance company policy holder could overpay. Just thinking about it now, Buffett wouldn't be so rich if his policy holders weren't overpaying, as you're implying.
Yes, but the dollar also has a very long history of being extremely stable. Said another way, the dollar has never had a 30% shock in a year (BTC did today...)
The dollar certainly has had 30% "shocks" in a year compared to gold, which is the usual standard. Most famously, obviously, 1971, but there have been more normal years with such changes as well.
You could also say that the US dollar is really backed by the US economy. Well, the US economy is S&P500 + a few percentage points. Well that has dropped, and gained more than 30% in a year as well (depending on the foreign currency you use to measure this, or if you're talking in gold price, we've seen 60% drops happen. Of course the S&P 500 is worth more than all the gold in the world, so ... this is a bit of an artificial thing to do. Truth is that if someone started buying the S&P 500 using large quantities of Gold, that wouldn't work, so perhaps that is actually right).
Shocks is between quotes because they weren't really shocks. Everybody in finance was perfectly aware of the "real" price for the US dollar, in 1971, but political hubris and re-election factors did not allow the government and congress to admit to this, until every other avenue was exhausted, including lying, cheating (not charging the same price to everybody despite their own laws demanding they do so), fraud, and so on.
Or to put it another way, one might even make the comment that the dollar lost such amounts against gold for the worst possible reason : a refusal by the US government to settle debt for the agreed price (specifically, as has come out, the refusal of the US government and the congress to honor the agreed-upon exchange rate the French government demanded they pay). Surprisingly when I tell my bank that my loan is now only against half my house, such flexibility is not extended to me, and congress in fact has laws preventing this ... weird, since they clearly see it perfectly moral & valid to do this themselves, and even to do it to pay off (their favored) banks.
30% changes in the value of the dollar have happened before, and in all likelihood, will happen again. Granted, it's been a while.
No, how about users (me, at least) are leaving Twitter because it's a rotten cesspool of misogyny, racism and stupidity. Maybe users should get a choice to avoid some of this?
Any public platform is going to have this. You have to first decide what you don't want in clear language and legislate it very specifically and clearly. Or you will destroy diversity and free speech.
Newspapers and TV are controlled so you don't see too much of it. But any public internet site cannot avoid this without heavy moderation which at Twitter, Youtube, Facebook scale are not easy problems to solve.
If you were looking to exercise, wouldn't you just ... ride a bike? And if you aren't looking to exercise, why do you want to walk on a treadmill while riding an e-bike?
I just ordered a Model S with Autopilot, and as I've been reading the comments on the various Tesla forums, I'm not sure I'm ever going to use it. Some of the stories are honestly terrifying (sudden deceleration on the highway, swerving into other lanes, etc).
I am one of the biggest Tesla fans out there. I fucking love the company. But Autopilot in its current form is nothing short of dangerous.
I took a test drive in a Model S a couple months ago and enabled Autopilot at the Tesla rep's encouragement while on a straight stretch of route 90 near Boston. We were going 70mph, a safe speed.
The car came to a point where the highway curved, and a slight deceleration is required to navigate the curve correctly.
Little did I know, Autopilot stays at the speed you set and does not alter it as the environment requires, short of not hitting the car in front of you. So of course it tried to take the curve at 70mph and swung out of the lane almost instantly, prompting immediate corrective action from me to avoid a serious accident.
I couldn't believe the Tesla rep hadn't made this clear. I was required to have my hands on the wheel, but the position of my hands doesn't ensure that I'm mentally ready for egregious errors on the car's part and prepared to correct them at a split second's notice at all times.
Operational question mark aside, as an investor I was also astonished that the software was still in such a rudimentary state that it didn't know to slow down on curves. I found this troubling. It was scarcely more advanced than cruise control, to be honest.
It's the one place where I think Elon is really gambling with people's lives as well as his company's credibility, the former being an infinitely worse transgression than the latter.
That's not true at all. AP (at least HW2 AP in my car) does definitely slow down for curves. This is more apparent on surface roads, which have more extreme curves. My car will slow down ~15MPH on one curve, whereas I would only slow myself ~5MPH. It's definitely a part of the system.
Yeah, this is 100% false.
I've owned a Tesla for over a year.
I take several curves on a daily basis with the speed set to around 82 mph. Going into the curve, the car slows down to about 65 mph, which is the speed every other car on the road takes that curve. It's even stated in the AP documentation and release notes. Go ask other Tesla owners as well. I've never heard of a Tesla being "swung" out of a lane on a curve.
Tesla uses a combination of the visual lanes, cars in front, and an accelerometer, to determine the curve and how much it needs to slow down.
Other than a freak situation last year (not on a curve, it was the hill crest with the white truck crossing the highway), every SINGLE accident has been shown to be the drivers fault with autopilot disengaged. Not a single accident of what you described has happened.
You may however be overestimating how much a car like the S needs to slow down in a turn. It has a really low center of gravity. Maybe it didn't need to slow down at all and you were just being paranoid.
Can you provide a map link to the stretch of road where this happened?
I don't think I was being paranoid....I'm generally a very, very fast driver who prefers the inner lane and 85mph+ speeds given the opportunity. I do know the car has amazing handling but it unequivocally started swerving heavily out of the lane at the speed it was traveling at.
It's route 90 between Allston and Back Bay. It looks like a pretty gentle curve so looking at the map certainly makes my description of events seem questionable, but I can only tell you that it occurred as I described.
It gets worse, if your Tesla is following a car in front of you, and they switch lanes, but you can’t switch lanes because another car is coming from behind in that lane, the Autopilot will switch nonetheless.
This almost killed a tester from the German federal motor vehicle approval agency. Their overall report is devastating, and shows the Tesla autopilot is little more than a glorified cruise control, marketed in a very deceptive way.
I'm not sure what to say when the code I recently turned in (and passed) for the path planning project of term 3 in Udacity's Self-Driving Car Engineer works better at changing lanes than Tesla's system:
Then again, it does have a failure mode where occasionally, for some reason, it will direct the car to change lanes into the path of a much faster moving vehicle in the lane being changed to. Most of this is because it only runs the behavior planner every second or so in the simulation, and probably does get everything perfectly correct in the prediction part (I honestly am not sure where the problem lies, though).
The problem Tesla has is that their system only has ~ 40 meters visibility to back or front.
That means if you're on the Autobahn, at say 130km/h in the right lane, and a Porsche is coming from behind at 300km/h, the Tesla will not be able to see it, and consider the lane free.
It’s quite interesting, because obviously an entirely different class of issues becomes apparent when the speed between two lanes on a highway can differ by a factor of 4.
This is what you get when the speed limit actually is "unlimited".
When the Tesla can not reliably detect lanes (for example, due to too dense traffic), it starts to just follow whatever vehicle is in front, and determines the lane from that vehicles movement.
Not always, in highway traffic the lane markings are frequently too obscured to be readable by the camera, but if it believes that the cars in front are driving in the lanes, it just uses them.
Otherwise autopilot wouldn't work at all on highways.
Sounds like the issue was the steering input, not the speed. I call BS on there being a single non-construction stretch of I-90 you can't take at 70mph in a Model S. Hell, the true speed is probably much closer to 110.
Normally I'd call the issue "the driver", but since the car was automated, it was an input failure, not a curve that couldn't be negotiated at that speed.
You're getting a lot of naysayers here who take one experience and extrapolate it to mean everyone. There are a lot of Tesla drivers out there who use it every day to and from work. I suggest you try using and evaluating the system yourself.
It's a food company, and its product is fully baked. Why aren't they bootstrapping? Are they not profitable? If so, how do they have a business? If I sold ketchup at a loss, would I be able to close a $50M financing round?
If you call it Ktchp.io, you pretend you're using a better recipe generated through machine learning, you create an AR solution to serve it better and more effectively, [insert easy quip about startup culture here], then maybe yes.
Or the company doesn't really sell ketchup but it offers a platform that lets you share ketchup with your neighbors for a small fee (initially subsidized by investors).
Even if -- some would say especially if -- you are profitable, you might take outside money to speed up the process. Not that unusual.
Speeding up is useful for many reasons. Just to name a few: you have a lead and want to maintain it; you suspect the window for product adoption is limited; you want to grow the business and sell it so you can move on.
They could grow slowly for the next 10 years, or throw lighter fluid on it and grow more aggressively, giving investors a cut along the way.
Rob says in the post that they will be using the funding for faster expansion:
> "This funding will enable us to expand our current product offerings, support our expansion efforts into traditional retail and international territories, and further our goal of bringing Soylent products to people around the world.”
