re: Bill Ackman: Government has 24 hours to fix Silicon Valley Bank debacle

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Perhaps they should have better diversified their account holdings.

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Spreading out these accounts over 2000 banks?

Then -



Now - lol



Yep -

Bank needs to quickly open up some branches in Ukraine and the government will swiftly bail them out

Translated: government has 24 hours to make me whole or else I'm wiped out.

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OK, so they are profitable business and should be able to restock the reserves.

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Finance 101 (pre 1980's)
Net profits (after taxes and expenses)
25% to management (all levels)
25% to labor
25% to dividends
25% to future (R&D + PP&E)

Finance 101 (1980's to current) - "greed is good" era
Net profits (after taxes and expenses)
95% to top management only
5% to everybody else
Stopped paying dividends
Stopped investing in windows greater than 6 months

I think the FDIC is fairly quick, never heard of 99 year payout

250K for the average American can sustain them pretty well. If you are really rich you are expected to diversify and have other resources at this point.

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They get vested stock options, which takes $0 from workers receiving a portion of net profits.

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It is how you skin the cat

Eisner got 600 million in compensation for 1 year back in the 80's and it was all stock options. I got out of Disney and invested my limited wealth elsewhere. Problem is it has become so commonplace now nobody pays attention any more.

If I am a top executive and have to buy stock on the open market I must reach in my own wallet to pay for it and I take similar risk as any other investor as to timing.

With stock options I have no skin in the game as the options are "free" to me and may be covered by treasury stock so I get the option and cash out so the stock is free which is bought back by the company and deceases wealth and assets of a company at no cost to the executives.

It is why I hate stock buybacks when the better policy would be pay dividends to the actual folks who took the risk and bought (and held) the stock in the first place. Bigger issue is if the stock is then retired which makes the books look better even if it did not bring in a single dollar of revenue from actual business.



The percentages above were rough numbers for illustration. In reality if a company made 3% - 6% of gross they were successful and that was the staring point for the 100% example.

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How far do you think $250k will go for Roku? Would that even allow them to make payroll this week?

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If I were CFO for Roku I would be smart enough to know diversification is key to mitigating damages of putting all of your eggs in 1 basket. I would also have EXTREME due diligence if I had 500 million in a single bank and probably have some corporate reinsurance for emergencies like this. I would also probably have a % of my free cash in near cash equivalents like short term treasuries just for emergencies like this.

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And? Perhaps they should have better diversified their account holdings.

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You people are fricking Idiots. These companies did nothing wrong. The bank made poor investment choices and the Fed raising the rates as quickly as they did caused this. It isn’t like Roku was investing in speculative trades, their money was simply on deposit with this bank.