Read on Twitter
I'm sure you have seen these headlines,
"Zuckerberg loses a $16bn in a day"
"Bill Gates is worth over $100bn"
"Kanye is now worth $3bn"
Net worth is a point in time measure. It fluctuates almost daily. Depending how liquid you are, it can fluctuate by A LOT.
[Quick Thread]
"Zuckerberg loses a $16bn in a day"
"Bill Gates is worth over $100bn"
"Kanye is now worth $3bn"
Net worth is a point in time measure. It fluctuates almost daily. Depending how liquid you are, it can fluctuate by A LOT.
[Quick Thread]
What's liquid?
Liquid isn't just a finely crafted single malt. It's how easily you're able to convert assets into cash.
You drive a Ferrari & own a Camps Bay villa. You're at the garage at 3AM buying a Red Bull
Can you pay using your house? No.
You need actual cash on hand!
Liquid isn't just a finely crafted single malt. It's how easily you're able to convert assets into cash.
You drive a Ferrari & own a Camps Bay villa. You're at the garage at 3AM buying a Red Bull
Can you pay using your house? No.
You need actual cash on hand!
Zuckerberg has 410m shares of Facebook. FB stock is now at $190.
That gives him a net worth of about $78bn.
If FB stock slides to $170, he's now worth $70bn.
Did he actually just "lose" $8bn?!
No, because he hasn't sold a single stock. Fancy finance term is "unrealized"
That gives him a net worth of about $78bn.
If FB stock slides to $170, he's now worth $70bn.
Did he actually just "lose" $8bn?!
No, because he hasn't sold a single stock. Fancy finance term is "unrealized"
Hands down, Comeback Kanye is an incredible story. Bankruptcy to Billionaire.
If he's worth $3bn, how much cash do you think he has immediate access to at any given second? $1bn? $2bn? All of it?
He has $17mn in cash & $35mn in stocks.
The rest is tied up in non-liquid assets.
If he's worth $3bn, how much cash do you think he has immediate access to at any given second? $1bn? $2bn? All of it?
He has $17mn in cash & $35mn in stocks.
The rest is tied up in non-liquid assets.
Kanye owns 100% of Yeezy. Adidas produces & distributes them.
He gets most of the profits right?
No. He gets royalties of 15% of the sales and it's closer to 10-11% after expenses.
Basically, Kanye makes 10c for every $1 in Yeezy sales.
He gets most of the profits right?
No. He gets royalties of 15% of the sales and it's closer to 10-11% after expenses.
Basically, Kanye makes 10c for every $1 in Yeezy sales.
Depending on the valuation multiple you apply on his stake, he's worth at least $1.4bn.
That's based on an EV/Sales multiple of 10x applied to $140m in top line (2019).
Naturally he believes he can double the business in 5 years & that's actually not a outlandish estimate.
That's based on an EV/Sales multiple of 10x applied to $140m in top line (2019).
Naturally he believes he can double the business in 5 years & that's actually not a outlandish estimate.
Liquidity is a HUGE problem for companies exiting stakes. Executing deals on a M&A desk, you see it all the time.
There's usually a "liquidity discount" for highly specialized or hard to sell companies.
Sometimes it's up to a 30% haircut depending how desperate the seller is.
There's usually a "liquidity discount" for highly specialized or hard to sell companies.
Sometimes it's up to a 30% haircut depending how desperate the seller is.
Cash is King.
In good times, you want cash to work for you & generate more cash through leverage, productive assets & disciplined cash management.
In bad times, you want to be overweight cash & risk exposed.
What's the point of being ultra-rich if you can't spend it?
[END]
In good times, you want cash to work for you & generate more cash through leverage, productive assets & disciplined cash management.
In bad times, you want to be overweight cash & risk exposed.
What's the point of being ultra-rich if you can't spend it?
[END]
