
Amazon Looking to Buy Capital One? - lefstathiou
http://www.bankingtech.com/735552/amazon-looking-to-buy-capital-one/
======
EternalData
Amazon, which has some very large amount of knowledge on your consumer
spending habits if you use it regularly is now looking to get the complete
financial picture for a not-so-insignificant percentage of the world.

There's some powerful stuff you can do with that.

------
motivic
I work for Capital One, and this is almost surely pure speculation. I wouldn't
even call it rumor because there is no trace of evidence to this speculation.

I say put your skeptics head on if the title of the article ends in a question
mark (and also sources cited do not directly discuss the matter at hand).

~~~
late2part
How about a wager?

My first wager is that you're not in a position to know if it's being
discussed.

My second wager is that it happens. For starters I'll bet you $100 with 40:1
odds that it does happen. Happen defined as "Both parties announce intentions
to merger/acquire within 6 months from today."

~~~
nickff
You are 2.5% confident that something is going on that the parent poster
doesn't know about? While I applaud your willingness to bet, your first 2
sentences indicate much more confidence than your proposed odds.

~~~
late2part
I think the odds in my proposition give me sufficient edge to proffer the bet.

~~~
nickff
But you implied there was a 97.5% chance that the parent was right. You
basically agreed with the previous post, while saying they were wrong.

~~~
late2part
I didn't agree. He said it would not. I said it could. I said it was more
likely than he said and I would put money on it.

Your use of basically is ambiguous.

~~~
nickff
If I say there is a 97.5% chance that the parent was correct, am I more
agreeing or disagreeing? WEP standard says that anything above 94% is "almost
certain", so you 'basically' said that it was "almost certain" the parent was
correct.[1]

[1]
[https://en.wikipedia.org/wiki/Words_of_estimative_probabilit...](https://en.wikipedia.org/wiki/Words_of_estimative_probability)

~~~
late2part
These words you are putting in my mouth don't fit.

97.5% probability is nothing like almost certain.

I think we just have different viewpoints on precision and language, friend. I
still like you!

------
tboyd47
> Regulators in the US are taking interest in the large sums collectively kept
> on stored value cards and the associated mobile apps. “The money stored on
> these cards – and any similar stored value accounts – are effectively the
> same as bank deposits and as the total value now exceeds the deposits at
> smaller US banks, regulators are seeing a need to apply oversight,” O’Brien
> says.

What exactly are these "stored value cards" with associated mobile apps?
Things like gift cards? Or are they talking about Apple and Android Pay?

~~~
bigtunacan
It sounds like they are talking about gift cards, gift card apps, and
alternative payment apps. These days that's probably a very large umbrella.

Everything from a Google Play or iTunes app to apps like BlendCard, Gyft,
Dwolla, Venmo, Square Cash, etc... would likely fall into this. Depending on
how PayPal is structured any funds you have sitting in a PayPal account could
also fall under this umbrella; which that alone is probably a significant
number these days.

------
kevinstubbs
Can somebody explain how Amazon could buy them if Capital One's total assests
are worth $334 billion? Presumably the valuation would be some multiple of
that. Amazon doesn't have enough liquid cash, so how would they do it?

~~~
GauntletWizard
You've raised like five questions in three sentences, so here's the low down:
Capital One isn't worth $334B. It manages assets worth $334B. Those are the
totals of the deposits creditors have with it. Capital One is worth $44B as of
this writing[1].

Many companies have fixed capital assets worth less than the company, because
they've financed those assets with debt, which would have to be acquired or
repaid at the time of the company's sale. Some companies have close to no
fixed assets but are worth much from their prestige or ability to execute.
Some companies have secondary liabilities that are worth much more than their
assets - See Yahoo, who were at one point worth less than the valuation of
their holding in Alibaba.

Buyouts are rarely done in cash. They're often done in financing, with several
banks lending money to the company to cover the total purchase price. They're
also frequently done in stock, where the buying company gives the acquired
company shares in the buyer equal to the value of the acquired - Either by
issuing new stock, or by simply buying up the old, or some combination of the
two.

[1][https://www.google.com/finance?q=NYSE:COF](https://www.google.com/finance?q=NYSE:COF)

~~~
jerf
Buying Capital One with Amazon stock would probably be an appealing
proposition to Capital One stock holders:
[http://finance.yahoo.com/chart/AMZN#eyJjb21wYXJpc29ucyI6IkNP...](http://finance.yahoo.com/chart/AMZN#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%3D)

------
jonknee
> Regulators in the US are taking interest in the large sums collectively kept
> on stored value cards and the associated mobile apps. “The money stored on
> these cards – and any similar stored value accounts – are effectively the
> same as bank deposits and as the total value now exceeds the deposits at
> smaller US banks, regulators are seeing a need to apply oversight,” O’Brien
> says.

There is zero chance the new administration is going to make new regulations
that are unfriendly to financial institutions.

~~~
nickff
I am not a fan of the new administration, FTC, CFPB, or even FDIC, but all
regulations have disparate impacts on banks depending on their size and
structure. The large banks have benefited from recent complicated and nebulous
regulations with high compliance costs. Re-regulation is why the too-big-to-
fail banks have gotten bigger. Deregulation would benefit smaller banks, and
harm the larger ones.

~~~
cle
I guarantee that big banks will be involved in any deregulation, and will be
working to steer it in their favor for competitive advantage. It happens with
any _change_ , whether it's adding regulation, re-regulation, or deregulation.

------
thedevil
Amazon's business model is based on great service to customers at a low price.
Capital One's business (edit: their credit card business) is based on screwing
consumers for as much money as they can legally (another edit: my impression
is based on anecdotes from many years ago, before the ING acquisition).

Those aren't very compatible business models. If Amazon wants a bank, there's
probably a lot of options with better synergies.

~~~
astrange
> Capital One's business is based on screwing consumers for as much money as
> they can legally.

Harsh words for someone who runs a bank with no overdraft fees!

I always thought their business model was giving people with starter credit
(like college students) credit cards and car loans.

~~~
thedevil
> I always thought their business model was giving people with starter credit
> (like college students) credit cards and car loans.

This is what I've seen of them. They offer college students (who don't know
better) really bad credit card deals with high fees and high rates and sneaky
"gotcha" contract terms.

Although I may be overly harsh since my impressions of them are all based on
their credit cards. For all I know, their other banking services are ethical.

Also to be fair: by the time Capital One acquired ING, I was too old to know
many college students so my anecdotes were all from before then.

~~~
astrange
They gave me a first credit card with 1.5% cash back rewards, a nice website
and easily accessible customer service over chat. Not once have I cared what
the interest rate was, of course, so they could be getting you there.

The rewards system works better than everyone's current favorite CSR, because
you can use it to refund past purchases instead of just buying hotels with
points in the Chase store.

The benefits that try to compete with Amex (like extended insurance) are
harder to use since you have to actually call in instead of just filling in
web forms.

~~~
thedevil
After yours and other comments, I suspect my information is just really out of
date.

Here's some stories I had heard back when I was in college: no cash back or
other rewards on the card for students, $2/month on an unused $500 credit
line, a $38 late fee (late = paid the day due after noon eastern time,
regardless of consumer time zone), and a rate that skyrockets after any missed
payments.

Again, these may have changed since then since there's several replies of
people with good experiences.

~~~
ydt
I had one of their cards years ago when I was in college. It was as you
describe. Years later I now have a personal and business card with them and
the terms are good with a decent mileage program (and they have a real nice
mobile app). Of course, now I have excellent credit/ income. I think they're
all the same In That regard. If you have poor/no credit you're going to get
taken advantage of.

------
ryanmarsh
Amazon would ruin the good culture growing at capital one.

~~~
notyourwork
Implying what exactly?

------
philiphodgen
Dupe
[https://news.ycombinator.com/item?id=13662945](https://news.ycombinator.com/item?id=13662945)

~~~
dang
It doesn't count as a dupe if the post didn't get significant attention:
[https://news.ycombinator.com/newsfaq.html](https://news.ycombinator.com/newsfaq.html).
HN allows a small number of reposts in such cases because good articles often
need multiple cracks at the bat to get seen.

I'm not sure this is a good article though. It seems to be nothing but a
rumour.

~~~
notyourwork
What makes a rumor good or bad? This certainly isn't the first article on here
that is speculation.

~~~
dang
Supporting evidence, I suppose?

