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Money Stuff: Fungible Slices of Non-Fungible Tokens

by
Matt Levine
Money Stuff
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20% of a picture of a dog revisited

  • Yesterday, 20% of an NFT of the original "doge" was sold for $45 million despite the original price of the entire NFT being bought for $4 million.
  • A reader suggested that the owners could have sold the most valuable 20% of the NFT at $229 million, leaving the remaining 80% of the NFT valued at negative $225 million.
    • This is a cool concept, but it was not actually what happened. There were actually 17 billion copies of the picture.
  • Another reader suggested that the NFT would have more worth if the owners split the picture of the dog into 17 billion pieces because people want to buy unique digital objects rather than copies.

Due Diligence on Reddit

  • On August 12, typing in amazon.com/affirm no longer led to an error message and redirected to a link that said: "Pay over time with Affirm."
    • This suggests that Amazon had entered into a partnership with Affirm Holdings, but Amazon didn't announce the partnership until August 27.
  • A Reddit user said he bought a bunch of Affirm call options after realizing this and made a ton of money on it.
    • This shows that a major function of Reddit is sharing fundamental due diligence on meme stock.
    • While much of this due diligence is "amateur," some of that due diligence (like the post by the above Reddit user) is pretty good.

ESG: Greenium

  • A form of ESG borrowing is a "green bond," in which a company borrows money and commits to using it for some sort of environmentally sustainable project. In exchange, the bond carries a lower interest rate (the greenium).
  • A boom in ESG investing in Europe has pushed up "greenium" investors' willingness to pay for the debt compared to regular debt.

ESG: Recycling

  • The triangular recycling symbol is everywhere. What many don't know is that even if the item isn't recyclable, the sign is displayed.
    • In CA, a bill passed on Wednesday that banned companies from using the symbol unless they can prove their product is recyclable.
  • There is probably a lot of value to be created by telling people soothing things about ESG, even if it's untrue.

ESG: Shorts

  • If companies have some negative climate impact, then that suggests that specialized short sellers are generally the most environmentally friendly investors.
  • There is another way to think about this: If you are in the business of short selling, then you generate a lot of _negative _emissions.
    • You are trapping carbon through short selling, but other people should be able to buy those shares from you and neutralize your actions.

People are worried about stock buybacks

  • Democratic senators proposed a 2% tax on corporate stock buybacks in an effort to boost investment and reduce "tax avoidance."
    • Their argument is that large corporations used the tax cut to reward their wealthiest investors through stock buybacks rather than invest in their workers.
  • It could be the case that senators slapped an excise tax on buybacks because they are tax-efficient and can raise money for the government.

Financial meta-careers

  • Chon is a former investment banker who quit his job to advise other people on how to get investment banking positions.
  • Many quit their analyst positions because they don't think they are having an impact on the world.
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