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Credit report shows Meta keeping $27B off its books through advanced geometry

news.ycombinator.com

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Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#201

Post by Aurornis »

everybodyknows wrote: post #157
Aurornis wrote: post #101

Earlier quoted context omitted.

There are a lot of places where the credit ratings are hardcoded (to borrow a term) into funds. There are pension funds and other vehicles that might be bound to only invest in AA rated companies. So if a company drops their AA rating it could force them out of a lot of funds and investment vehicles. This complicated vehicle where the debt and assets are in another LLC isn’t actually tricking anyone in finance. If yo…

> isn’t actually tricking anyone in finance. Surely the ratings agency people are "in finance"? Or are they in on the game, and sliding their way back to 2008, writing ratings for "deals structured by cows"?

They're not being "tricked" in the way these sensational substack posts would like us to think. You're not being given some secret knowledge that the ratings agencies don't have.

The mistake throughout this comment section is to assume that the debt is functionally equivalent to Meta haven taken it on themselves, consequences and all. It's not.

Putting things in an LLC vehicle provides some protections. Both for large corporations and you and me as individuals. However if you put an asset in the LLC the lenders also know that those protections exist and will adjust terms accordingly. Meta has taken this into account, found some favorable terms, and pursued that direction.

The narrative that this is a secret loophole that lets them take on debt but also not take on debt is the substack authors doing their thing to make it more sensational than informative.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#203

Post by Aurornis »

turtlesdown11 wrote: post #152
Aurornis wrote: post #151

Earlier quoted context omitted.

No it’s not. It’s sarcastic, snarky, sneery content that appeals to a certain group. The actual subject matter has already been covered well by good writers like Matt Levine, WSJ, and others.

> No it’s not. It’s sarcastic, snarky, sneery content that appeals to a certain group. What on earth does your second sentence have to do with the quality of the writing? Try just a bit to separate your emotions from the text.

How does it not have anything to do with the quality of the writing? The writing is supposed to convey some facts, but it's too busy pushing narratives and layering on snark that it fails to convey real facts. Even in this comment section the people who applaud the article don't really understand what's happening because they soaked up so much of the narrative-pushing from the article.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#204

Post by solatic »

notatoad wrote: post #142
htrp wrote: post #65

Earlier quoted context omitted.

You can if you are Meta and are willing to litigate the hell out of it.

“If you are meta” in this case means “if you have a billion dollars already, and a credit rating that you don’t want to destroy. Nobody is trying to pull one over on a bank here. Pricing the risk of the loan is a bank’s whole business, they’re happy to loan to meta because meta is meta, and they’re a good candidate for a loan.

> if you have a billion dollars already

Meta has $44.4 billion in cash-on-hand as of September 2025.

I'm correcting you because people can't really fathom just how wealthy these companies are. They could buy startups for billions of dollars with literally the cash they have in their bank accounts, let alone debt or stocks.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#205

Post by noobcoder »

This isn't really about fooling lenders, they already underwrite this as Meta risk i feel. What is wild is how much economic substance you can legally shove into these non‑consolidated boxes, while GAAP still pretends form wins over who actually eats the downside

If this becomes the default template for AI capex, headline leverage stats for most of big tech are going to drift further and further away from their real balance sheets

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#206

Post by walletdrainer »

walletdrainer wrote: post #160
parliament32 wrote: post #88

Earlier quoted context omitted.

It's well written for its target audience, people who are used to reading financial analyses.

While I’ve seen a plenty of silly reports from big bank analysts, they usually have the advantage of not coming across like complete idiots when saying things like this > We assign a preliminary A+ rating to the notes, one notch below Meta’s issuer credit rating, It’s hard to get away with that when the report is attributed to a company and person which don’t seem to exist, hosted on some randos substack. Wording lik…

Well, I guess it’s my turn to look stupid. The author actually has some pretty serious credentials https://stohl.substack.com/p/credentials-such-as-they-are

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#207

Post by kotaKat »

michaelt wrote: post #169
mrandish wrote: post #146

It would be deeply ironic if this data center (or similar ones using creative accounting), are among those featured in the TV commercials Meta has been running in expensive national prime time slots in recent weeks. I've seen at least two different commercials each focused entirely on the personal story of a relatable, folksy person living in a small town in a fly-over U.S. state, talking about how the town was decli…

> Meta built a new data center nearby and this person along with many others got jobs there and now things are great. Creating such bustling workplaces as https://maps.app.goo.gl/fc9AGtsVwiLA1vd88 https://maps.app.goo.gl/fHvTWK4rWqrsqsmr9 https://maps.app.goo.gl/RzggPfd3xbBQbdoo6 and https://maps.app.goo.gl/MBjun6ad4zJmmrRV7 These facilities will sometimes employ as many as 100 people - so a state that can attract th…

Yep. Massena, NY totally got hundreds of jobs out of the shitty Bitcoin miners that came to town like Coinmint and whoever the hell "North Country Colocation Services" is. We were saved! Everybody is rich and healthy and happy!

... wait, no, we're not. We're still an absolute shithole at the top of New York, now with a bunch of sea cans sitting in front of abandoned industry we lost decades prior, humming away doing nothing for any of us.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#208

Post by mizzao »

yellow_lead wrote: post #10

Unfortunately I didn't find a mention of any mathematical geometry in the article.

"Nothing is created. Nothing is contributed. It’s a loop. Borrow money, earn interest, and use the interest to claim you provided equity. The kind of circle only finance can call a straight line."

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#209

Post by rs186 »

turtlesdown11 wrote: post #158
rs186 wrote: post #61

Earlier quoted context omitted.

It is not the reader's fault if the article is unreadable in the first place. Not to mention that asking help to explain a text is extremely common. I can read English, but I have never read a US supreme court ruling. There are much better ways for me to understand those rulings to me as a non-lawyer.

> I can read English, but I have never read a US supreme court ruling. There are much better ways for me to understand those rulings to me as a non-lawyer. Having admitted to never having read a SCOTUS ruling, how can you then proclaim there are better ways for you to understand? How could you possibly make that assertion if you've never read a SCOTUS ruling?

SCOTUS ruling: 213 page PDF.

News article: 500 words that provide everything I need to know.

Unless I am actually very interested in the ruling, this seems an easy choice. Because I just wouldn't open that PDF file at all.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#210

Post by caminante »

jrflowers wrote: post #198
tgsovlerkhgsel wrote: post #176

Isn't the point that they intentionally glossed over ("We did not model what would happen if data center demand collapses and Meta cannot secure a new tenant. This scenario was excluded for methodological convenience.") a pretty important one? If I understand the explanations on HN, the complaint is that Meta is taking on debt, which would normally affect its credit rating, so they're "hiding" the debt in a LLC witho…

>Isn't the point that they intentionally glossed over ("We did not model what would happen if data center demand collapses and Meta cannot secure a new tenant. This scenario was excluded for methodological convenience.") a pretty important one? It is a joke. This is a humor post on a comedy blog. This substack is not actually a bond rating agency.

It's not good humor though.

This blog is in the "no man's land" of satire v. serious. Doesn't pick a lane and people get confused, but it's not funny, "bit the onion" confused.

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