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Crypto trading firm Alameda Research might be insolvent

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201–210 of 216 posts

Re: Crypto trading firm Alameda Research might be insolvent

#201
post #150

Earlier quoted context omitted.

> First very simple point, to become insolvent you have to actually take a loss somewhere. This has absolutely NOTHING to do with being insolvent. "Insolvency In accounting, insolvency is the state of being unable to pay the debts, by a person or company, at maturity; those in a state of insolvency are said to be insolvent. There are two forms: cash-flow insolvency and balance-sheet insolvency. " Insolvency deals wit…

I'd argue balance sheet insolvency is really the most colloquial definition insolvency. You can always sell assets (at a haircut of course) to evade cash flow insolvency (arguably that's closer to illiquidity really), but you can't do anything to get out of balance sheet insolvency except restructure your liabilities. Alameda being in balance sheet insolvency would depend on their assets taking enough of a hit to wip…

> To Doug's point the junk tokens are likely at book value on their balance sheet

The linked article in turn links to coin desk which writes

>> Also, token values may be low. In a footnote, Alameda says “locked tokens conservatively treated at 50% of fair value marked to FTX/USD order book.”

That suggests to me the unlocked coins are on the balance sheet at market value and the locked at a 50% haircut.

Re: Crypto trading firm Alameda Research might be insolvent

#202
post #139

Earlier quoted context omitted.

- internet person says he works in the crypto space - is actually financially illiterate Checks out, sadly.

I graduated with a degree in finance from Wharton, worked as a quant at Citadel Securities, and have been a high-frequency trader for more than a decade. But I'm more than sure that your credentials at finance or trading are more qualified. :)

You should ask the money back from Wharton. One of the respondents below explains what insolvency means (correction: pretty much all of the comments below).

Re: Crypto trading firm Alameda Research might be insolvent

#203
post #99

Earlier quoted context omitted.

Don't worry, your critique is fair and square, what you have to understand is that you probably piss a fair amount of people here already by virtue of your username alone! Cue takes on how "affinity scam" somehow doesn't apply & even more contrarian moaning re: crypto bad.

Is "crypto bad" even contrarian? It strikes me as the precise opposite: conformity to the "traditional finance good" status quo .

From the point of reference set to HN? I think so, yes, why not?

Re: Crypto trading firm Alameda Research might be insolvent

#204

Earlier quoted context omitted.

You assume that during a firesale they would actually get value approaching what they claim is worth 14.6B. Since FTX and Alamaeda are by far the largest holders of FTT and significant holders of Solana they will destroy the market for both if they had to sell. It's likely the real value of their assets is far lower, as the other commenter suggested.

I'm just taking the numbers from the article itself and the assumption that FTT specifically is worthless (extreme enough on it's own). If you assume a fire-sale on everything, then everyone is insolvent all the time...

Given today's news I just want to say lol. FTT down 58% and the real fire sale hasn't even begun. Alameda is doomed and will fall next.

Re: Crypto trading firm Alameda Research might be insolvent

#205
post #139

Earlier quoted context omitted.

- internet person says he works in the crypto space - is actually financially illiterate Checks out, sadly.

I graduated with a degree in finance from Wharton, worked as a quant at Citadel Securities, and have been a high-frequency trader for more than a decade. But I'm more than sure that your credentials at finance or trading are more qualified. :)

Lmao. So did all the guys at Lehman, Bear Stearns and LTCM.

Re: Crypto trading firm Alameda Research might be insolvent

#206
post #139

Earlier quoted context omitted.

- internet person says he works in the crypto space - is actually financially illiterate Checks out, sadly.

I graduated with a degree in finance from Wharton, worked as a quant at Citadel Securities, and have been a high-frequency trader for more than a decade. But I'm more than sure that your credentials at finance or trading are more qualified. :)

Ouch. Care to comment now?

Re: Crypto trading firm Alameda Research might be insolvent

#207

As someone in the industry, it's almost certainly not . First very simple point, to become insolvent you have to actually take a loss somewhere. They may have a lot of junk tokens on their balance sheet, and these tokens may be overmarked, but Alameda's cost basis (most of them were from seed rounds) is still way below their current value. With Three Arrows it was very obvious where the loss was from, they were hyper…

Given the recent events of the last 24 hours, what's your updated view on this?

Re: Crypto trading firm Alameda Research might be insolvent

#208

As someone in the industry, it's almost certainly not . First very simple point, to become insolvent you have to actually take a loss somewhere. They may have a lot of junk tokens on their balance sheet, and these tokens may be overmarked, but Alameda's cost basis (most of them were from seed rounds) is still way below their current value. With Three Arrows it was very obvious where the loss was from, they were hyper…

with the benefit of hindsight, please tell me you wrote this just to front running the rest of us and that you don't believe any of these words

Re: Crypto trading firm Alameda Research might be insolvent

#209

Earlier quoted context omitted.

On 2022 11/4 7:50 am Pacific, this was the top-ranked comment on this article on HN.

Why do you timestamp it ?

Because it only took ~24 hours for this comment...

>As someone in the industry, it's almost certainly not.

... to be proven wrong.

Re: Crypto trading firm Alameda Research might be insolvent

#210

As someone in the industry, it's almost certainly not . First very simple point, to become insolvent you have to actually take a loss somewhere. They may have a lot of junk tokens on their balance sheet, and these tokens may be overmarked, but Alameda's cost basis (most of them were from seed rounds) is still way below their current value. With Three Arrows it was very obvious where the loss was from, they were hyper…

>As someone in the industry, it's almost certainly not.

Oof, this aged terribly. Didn't even take 24 hours.

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