Wow why did it go for so much less than the last valuation? Is the overall market turning bad or is it just a Brex thing?
Investors will only invest in AI plays. They don’t seem to care for fintech.
...and Blockchain!
Capital One to acquire Brex for $5.15B
261–270 of 374 posts
Re: Capital One to acquire Brex for $5.15B
#262Earlier 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…
> It's a subsidy of the financially illiterate to those who are.
Counterpoint, the financially literate are subsidizing the existence of the financially illiterate via taxes and social programs.
Re: Capital One to acquire Brex for $5.15B
#263Earlier quoted context omitted.
If Ramp is getting all the business, is there any reason to think they wouldn't command a much higher valuation? Brex killed a ton of their customer relationships to "refocus" on larger biz. That created a lot of negative sentiment for the brand. > All Ramp did was spend more on ads and marketing That's distribution. It matters. Ramp has a much more synonymous name, better recognition, and less bad reputation.
Distribution is king. Kudos to Ramp for that. My weird thesis is that for whatever reason Ruby on Rails shops just seem to survive more. I wonder if someone did a stack specific survival rate analysis.
Pretty sure Ramp uses Elixir.
Re: Capital One to acquire Brex for $5.15B
#264Earlier 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.
"functioning" is doing a lot of heavy lifting here
Re: Capital One to acquire Brex for $5.15B
#265Earlier quoted context omitted.
I don't know why the downvotes, that's most probably what happened. These deals are rarely done for some economic reason, it's mostly because somebody knows someone else who can do it and get mutual benefit, a legalized version of fraud.
So you are saying VC bros are defrauding Capital One shareholders?
It's simply an example of the principal/agent problem, finance 101.
CapitalOne shareholders will decide if they want to sue the management over buying a company which primarily focuses on AI-bubble-startups.
We're at a very late stage of the AI bubble which might be the last ZIRP-fueled bubble to pop after which VC as an investment vehicle will be dead for years to come. Rising tide lifts all boats and all, but many of the "genious" VCs already have problems returning capital from their older funds.
Capital One management is friends with VCs, VCs want to cash out from their investments without big losses, some parties, some holidays, as easy as that.
Re: Capital One to acquire Brex for $5.15B
#266Earlier quoted context omitted.
(Frame of reference: US only) That's a shame, given 18-25 is just the age where a credit card skimmer or online card fraud causing a big fraudulent withdrawal from your checking account, and weeks of waiting to get it back, could be devastating. This has happened to people in my family (likely from gas stations) but we only use credit cards except to pull cash from ATMs, so we only suffer a temporary dip in our avail…
Really, this is a non-existing problem in most places outside the US. Are you still using magnetic stripes?????
It's a non existent problem in the US, too. The internet likes to blow things out of proportion, but not only are pretty much all payments made with tap to pay for many years now, even when it was magnetic strip, the incidence rate was miniscule.
Re: Capital One to acquire Brex for $5.15B
#267[flagged]
That's incorrect way of typing "tax fraud by US tech companies is theft from European citizens".
Re: Capital One to acquire Brex for $5.15B
#268Earlier quoted context omitted.
What 2% drag? Aren't you using credit card with 2% bonus? Just see it as 2% reduction in prices.
My friend, as a rule of thumb, every additional player im a transaction takes a cut. So assuming the rest is all the same, you just paid exactly what you would've paid with a debit card. Because the merchant had to raise prices to accommodate the fee. And that's with the credit card company not taking a cut and we all know that's not true.
The merchant chose to not offer a lower debit card / cash price because the merchant bets that people will pay a higher price if they use credit cards, so the merchant incentivizes credit card usage by asking for the same price for credit card and non credit card payment.
There are merchants that do not do this, such as Target, which charges 5% to use a credit card. Insurers/tutors/daycares/schools/healthcare providers/contractors/gas stations/restaurants/governments/utilities are also known to frequently charge more for credit card payments.
Any seller can choose to offer a lower price for debit card / ACH / Zelle payments if they want to.
Re: Capital One to acquire Brex for $5.15B
#269Earlier quoted context omitted.
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'…
> Your circular argument about costing the evil company money therefore makes your purchases justified, doesn't make sense. You are saying they make money off of interest which of course is correct. But I don't pay any interest so by your own logic I'm not contributing to this evil company's profit so how is it a moral dilemma? And how is my argument circular? > The rest of the western world is proof that you do not…
> I don't pay interest so I'm not contributing to [their profits]...
That's true, but by accruing rewards, you are indirectly incentivising the CC company to increase interest rates to subsidize your usage. If every single CC user didn't carry a balance, there would be no rewards (see Europe).
I think we ended up at a better place here at the end so I will end with the last point.
When I was 17-19 year old, I had a small credit card with a $3k limit. I never hit this limit and it was never a problem on my path to financial freedom and I largely paid off the balance in full every month. My spouse and I were debt free by 26yo after paying off $75k in student loans. My aversion to consumer debt has little to do with my own experience and more to do with how I see it affecting my friends and family and American society more broadly. We put speed limits on roads to protect people from themselves. I'm only advocating for similar guardrails as it pertains to credit cards and other high interest consumer debt.
Especially after moving abroad, I just don't see the point in a system that is built on top of so much debt. It only hurts the most vulnerable people in society while funnelling money back to people who probably don't need it, imo.
Re: Capital One to acquire Brex for $5.15B
#270Earlier quoted context omitted.
Stripe has for years helped non-EU companies to do tax fraud in the EU, and in a just world their management would be charged. Every time a customer in the EU pays with Stripe, they exactly know if they are a private customer or not and in which country that customer is located in. Stripe also knows who the counterparty is ("their merchant"). Yet Stripe systematically enabled their merchants to avoid paying appropria…
Why do you think that payment processors are obligated to intercept VAT? They're not.
Ignorance is bliss I guess? Unfortunately in civilized non-US countries we have a thing called accounting and if you spend money with the company credit card there is someone called "accountant" who wants to see the invoice.
And Stripe is OBLIGATED to tell me at least who is the damn COUNTERPARTY to my transaction. Company name, company registration number, company country of residence. Ideally with address. And - wow - now we have everything to actually legally follow up with the merchant to get a proper invoice from them.
But Stripe is actively obscuring this information, and making it hard for users to find out. Many of the Stripe merchants don't even have an imprint on their website.
You ask why they hide the information? Because otherwise it would be clear even to ignorant people like you that in fact a VAT needs to be paid on that transaction.