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Capital One to acquire Brex for $5.15B

reuters.com

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Re: Capital One to acquire Brex for $5.15B

#241

Post by weird-eye-issue »

yurishimo wrote: post #238
weird-eye-issue wrote: post #223

Earlier quoted context omitted.

What do credit cards have to do with debt? I've used them for over a decade and never a carried balance

Morally, they're also quite problematic, imo. Even if you aren't paying interest because you pay off the balance every month, CC companies can only offer points and cash back and all of that other stuff on the backs of the customers who aren't able to pay it off every month. It's a subsidy of the financially illiterate to those who are. If the predatory 20%+ interest rates were banned, the points and rewards programs…

In your moral dilemma your assertion is that the credit card companies are only making money off of people who aren't paying off their cards each month which must mean that people like me are costing them money by paying off each month. Since I'm costing these evil companies money then don't I have a moral obligation to continue using my credit card?

As for saying that the argument that using credit cards because they have more fraud and security measures is not a good argument because the world should be different is also quite silly and naive since arguments should be made based on how the world currently operates not how you wish it might operate in the future. Life is much easier when you live in reality

Re: Capital One to acquire Brex for $5.15B

#243

Post by solarkraft »

pinnochio wrote: post #236
qeternity wrote: post #227

Earlier quoted context omitted.

Spoken like someone who has never started a business. Brex raised much less than $5b and Capital One apparently thinks it is worth more than that (otherwise they wouldn’t buy it). This is called value creation.

Definitely. No company has ever overpaid for another company. No fraud or FOMO-driven overvaluation has ever occurred in an acquisition. And all acquisitions have always turned out for the best. It's all 100% pure value creation.

Your statement is true on average because the world’s economy is continuing to function.

Re: Capital One to acquire Brex for $5.15B

#244

Post by pinnochio »

solarkraft wrote: post #243
pinnochio wrote: post #236

Earlier quoted context omitted.

Definitely. No company has ever overpaid for another company. No fraud or FOMO-driven overvaluation has ever occurred in an acquisition. And all acquisitions have always turned out for the best. It's all 100% pure value creation.

Your statement is true on average because the world’s economy is continuing to function.

Oh wow, I don't even know where to begin with that.

Like, the world economy can't continue to function even if acquisitions were only 80% value creation on average? Or does the entire world economy depend on companies acquiring other companies with 100% value creation on average, such that it continuing to function logically implies 100% average value creation?

Re: Capital One to acquire Brex for $5.15B

#245

Post by bflesch »

pell wrote: post #228
bflesch wrote: post #221

Earlier quoted context omitted.

There is no credit card terminal in the whole EU which is not tied to a point-of-sale system, which only purpose is to create INVOICES. Somehow the Stripe team forgot that fact.

I find your critique not very sensible. Point-of-sale systems are not necessarily tied to the payment terminal just because they communicate to each other. If companies choose to use Stripe they do have to set up their own invoicing and tax handling. Your comment makes it sound like Stripe hides this fact and thus users end up not handling tax or invoices because they were mislead. But if you run any kind of business…

Stripe has built-in features for merchants to create invoices and receipts.

Stripe does KYC for their merchants and exactly know that they are a company of certain type from the US.

Stripe facilitates a sale of digital goods between the US-based merchant and EU-based consumer. At this point the US-based merchant is obligated to pay the VAT and create an INVOICE.

Only Stripe knows from which EU country the customer comes from. The US-based merchant does not know which EU country the customer comes from.

Therefore Stripe is obligated to calculate the applicable VAT (based on country of customer) for the transaction and deduct it fromt he payment amount. STRIPE IS NOT DOING THIS.

And once payment is made Stripe does not enforce the merchant to provide an invoice, even though Stripe knows exactly it just facilitated a sale of digital goods between US-based company and EU-based customer. Stripe even enables the merchant to put fantasy information into the receipts and invoices, they don't have valid company name, addresses, or registration numbers.

Stripe also allows their merchants who just did a transaction to EU customer to only offer a "receipt", with no sign of an invoice. This "receipt" can contain a single website url, it can contain total fantasy name, it does not need to contain an address, or even a country of the Stripe merchant. It does not contain a company registration number or jurisdiction of the Stripe merchant. It does not contain company type or legal company name of the Stripe merchant. EVEN THOUGH STRIPE KNOWS ALL OF THIS BECAUSE THEY KYC THEIR MERCHANTS.

This is in total violation of any EU accounting rules which also applied to Ireland where the Stripe EU HQ is.

Luckily Stripe lawyers know exactly that they are systematically aiding and abetting tax fraud against the European Union and once you press the proper regulatory buttons they will cave, and after months of stonewalling suddenly their merchants are forced to provide their FULL COMPANY NAME AND COMPANY REGISTRATION NUMBER AND COUNTRY OF OPERATION, and actually state VAT in the invoice.

But their default mode of operation is "We are located in Ireland, EU law applies to us, we know EU customer buys digital goods from US merchant, we KYD'd the merchant but still we ignore that EU VAT applies to the transaction".

Any accountants and lawyers working for Stripe Ireland should be disbarred just on the fact they are associated with this systematic tax fraud.

There was no systematic remediation of the situation - even though Stripe knows about tax fraud by a merchant, they will only restate the invoices FOR THE SINGLE CUSTOMER THAT COMPLAINS ABOUT IT instead of forcing the merchant to properly create invoices for every single transaction with EU customers of that merchant.

Show me a tax agency in your country which allows you to get away with this. It is highly criminal, systematic behavior, clearly targeted against the European Union.

Re: Capital One to acquire Brex for $5.15B

#246

Post by kasey_junk »

prattmic wrote: post #185
hibikir wrote: post #152

Earlier quoted context omitted.

A very big percentage of credit card expenses in the US come from cards with rewards programs, so you get money/gift cards/travel discounts in exchange for using the credit card instead of the debit card. A lot of this is funded from much higher interchange fees: It's ultimately the merchant you buy from funding most of the rewards. Since those very high fees are nowadays illegal in the EU, European credit cards cann…

How does this work when using a US credit card in the EU? I assume the merchant still pays the lower interchange fee, so are the banks just betting that customers won’t do a large proportion of spending abroad?

They exempt those transactions from rewards.

Re: Capital One to acquire Brex for $5.15B

#247

Post by Klonoar »

nokun7 wrote: post #189

That's less than half of Brex's crazy $12.3 billion peak back in 2022. But honestly, it’s still one of the biggest fintech deals ever and actually gives people real money in a market where most unicorns are just stuck. The founders are reportedly splitting about $1 billion each, early investors (2017-2018) are getting 12-80x returns, and YC’s tiny $120k seed turned into ~$100 million (800x, insane TBH). Even later fo…

“Breaking even” on what? The cost to exercise? Or the missed opportunity cost of going somewhere else?

Re: Capital One to acquire Brex for $5.15B

#248

Post by yurishimo »

weird-eye-issue wrote: post #241
yurishimo wrote: post #238

Earlier quoted context omitted.

Morally, they're also quite problematic, imo. Even if you aren't paying interest because you pay off the balance every month, CC companies can only offer points and cash back and all of that other stuff on the backs of the customers who aren't able to pay it off every month. It's a subsidy of the financially illiterate to those who are. If the predatory 20%+ interest rates were banned, the points and rewards programs…

In your moral dilemma your assertion is that the credit card companies are only making money off of people who aren't paying off their cards each month which must mean that people like me are costing them money by paying off each month. Since I'm costing these evil companies money then don't I have a moral obligation to continue using my credit card? As for saying that the argument that using credit cards because the…

Credit card companies make money from interest on debt. That is undisputed. To pay out your rewards, they need to make a profit above and beyond what it takes to run the business such that they can afford to give you 2% back. This leads to higher interest rates for everyone that are approaching usurious (imo). Your circular argument about costing the evil company money therefore makes your purchases justified, doesn't make sense.

I agree that the US financial system does not currently operate in a manner that is secure for consumers. I am not naive to that reality (I'm also American and have had various amounts of credit card debt throughout my life, and also times when I paid off balances for years). However, that does not diminish the societal responsibility to advocate for a financial system that is more secure by default. The fact that I need to expose myself to more financial risk in one area to circumvent a shortcoming in another area of the market is a bad thing, in my opinion.

Again, I think if we capped interest rates at something reasonable (12% maybe?), it would force credit card companies to more seriously evaluate if their customers can afford the debt they are incurring and this entire problem would disappear overnight. Sure, there would be less rewards programs as revenue would be decreased, but we would make society better as whole by not incentivising a financial instrument that ruins millions of lives annually. We tried doing it this way for almost 50 years and it doesn't seem to be working out for society if you believe the debt/income ratios as a percentage of GDP in the United States.

As to your last point, I'm much happier living in a reality where I own the things I purchase. Nobody is ever going to repo my car if I lose my job. A sheriff/the state is never going to come to my home and take things to pay off a creditor because I hit the unlucky lottery and was injured in a freak accident or Act of God. Please try to engage my arguments in good faith and not make personal attacks about my separation from reality. The rest of the western world is proof that you do not need debt to participate fully in society.

Re: Capital One to acquire Brex for $5.15B

#250

Post by hopelite »

Ancalagon wrote: post #26
paxys wrote: post #13

Sold for $5.15B. Brex last raised $300M in Oct 2021 at a $12.3B valuation.

All of these SaaS and Fintech startups from ZIRP were so overvalued.

ZIRP is basically still a major factor. The cancer of ZIRP was with us for literally a whole generation, that is not simply just undone by stopping the consumption of the carcinogen.

Unfortunately for the majority of people, there are effectively zero good outcomes from any of this. Just like none of the previous promises and assurances of how {insert technology} would make things better for everyone, while always turning out to only benefit a few; so will the current lies of the same pattern result in the same output.

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