
Hook Stock and Bank Breakups - processing
http://www.bloomberg.com/view/articles/2016-07-26/hook-stock-and-bank-breakups
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chollida1
Everyone once in a while someone will ask why public companies have to
continually grow revenues. I think this illustrates why. If the Left-Behind
Remainder Yahoo (LBRY) company just holds yahoo Japan and Alibaba then the
only growth it can have is from the two underlying corporations stock
appreciation, assuming they don't start paying dividends. LBRY now becomes a
very poor form of an ETF. One that has to pay for employees to run it,
accounting fees to be public, etc.

Now what happens if the underlying companies stop growing. What would you pay
for the corporation? you already need to discount the company by the amount in
capital gains you'd need to pay to liquidate it.

And each year the company loses a bit of money due to just paying people to
run it. I guess you can go activist on it and try and force them to sell its
holdings and shutdown. Which is essentially what Starboard did to the former
Yahoo.

Why would you even bother to invest in it. You can already buy shares of
Alibaba if you want and get the full value of its appreciation rather than
holding a tracking product that slowly looses money each year.

This company is a bit of a walking Zombie, it's great for some in that its now
an arbitrage opportunity.

I don't see why Alibaba or Softbank would be too quick to make a deal here.
Time is their friend as each day they wait the company becomes worth less.

~~~
gaadd33
Why do you need to pay people to run it? It would effectively become like an
ETF or a royalty trust. Looking at some royalty trusts, it seems they spend
about 1-2M/year on overhead which shouldn't impact the share price much price
much.

Why you would invest in it is a good question though.

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tribune
_...I feel like it must be a pretty good business to wander around D.C.
shouting "blockchain" until some government agency commissions you as a
consultant and pays you to write a report like this_

Matt Levine is a rockstar and this alone is worth the click

~~~
__derek__
He's such a good columnist that it makes me feel bad about myself, even though
we don't do the same thing. I recommend following him on Twitter even if only
for his tweets announcing his daily column, e.g.[1]:

> This newsletter is running around everywhere screaming “blockchain
> blockchain blockchain.”

[1]:
[https://twitter.com/matt_levine/status/753572846455095296](https://twitter.com/matt_levine/status/753572846455095296)

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ISL
The USPS blockchain graphic is worth the click.

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PaulHoule
Yahoo has Jim Cramer always flacking for it's stock. He thinks Yahoo is gr8
because it features his worthless stock tips. Boo-yah!

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etjossem
Another Bloomberg View article without a coherent point. It jumps around from
an empty hot take on the Yahoo acquisition to pointing and laughing at the
USPS. By the last section, it has degraded into an incoherent mass of linkspam
to Buzzfeed-quality stories. While I'm sure there are some great SEO reasons
for Bloomberg to do it this way, I think we're worse off as readers for it.

No upvote. Levine's work is arguably off-topic, and certainly not the quality
I expect on HN.

~~~
dharmon
Levine's daily Money Talk is always a quick recap of current events, with
frequent refs to prior columns. It's not supposed to be a coherent article
with a theme. Think of it like the entire WSJ biz/tech/money/investing
sections condensed into one article.

I'm not saying its your fault for not knowing this, though. It's a confusing
thing to see on the homepage of HN.

