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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

#281

Post by QuiEgo »

marssaxman wrote: post #134
blonder wrote: post #107

Earlier quoted context omitted.

May I ask why you eschew the basically free money that comes from credit card rewards as a responsible credit card user?

Is it really free money? Actual cash ? I've always seen rewards programs advertised in terms of discounts on specific products or services: consumer electronics, cruise vacations, furniture, gift cards, and other things I rarely spend money on. I expect it to be an overstock clearinghouse, something like the old Columbia House record club, where you would page through a catalog of random stuff looking for anything yo…

If you hold $100k in Bank of America (or a linked Merrill Edge account), they will give you up to 5.25% cash back for their credit cards in certain categories, and 2.62% unlimited.

https://frugalprofessor.com/bank-of-america-customized-cash-...

To your point, it's not free money at all: the credit card companies are collecting fees, and the merchants are passing them on to you. This is a way to claw a part of that back - if you don't use a rewards card, you're paying _even more_.

Re: Capital One to acquire Brex for $5.15B

#282

Post by DANmode »

CatsOnHats wrote: post #201

Brex literally came to us one day in 2022, and notified us that "We have 6 weeks to move everything off their service" they told us boldly they are refocusing on the enterprise market and we were only a "SMB". The guy who literally told us this framed it as a good thing for us like it was some sort of weird break up. At the time we had signed a large enterprise agreement not long before that, and we even were adverti…

I bet it’s not ironic at all if you take a peek at the ownership and investors of the two firms.

Re: Capital One to acquire Brex for $5.15B

#283

Post by silisili »

hvb2 wrote: post #229
silisili wrote: post #210

Earlier quoted context omitted.

Of course it's a US view. It's a US site and the OP even prefaced it as such. Does every reply need to do the same? Retailers(in the US) typically eat the cost. Some industries(in the US), like gun shops, are up front about charging more for credit card payments. Most companies(in the US) just see it as cost of doing business. Points have next to nothing to do with why you should always use credit cards(in the US). T…

> Retailers(in the US) typically eat the cost This is what I really have a problem with. It feels so incomprehensible to me that, assuming you're an adult, you can think this. It's just a cost, if that cost didn't exist then either the price would be lower or the margin would be higher. In the end you're paying for it. You're the one exchanging money for a good/service. This is proven by your other comment about how…

That's a fair argument, and if all companies decided to pass the costs directly on to the user at checkout time, the conversation/advice would probably be a lot different.

For whatever reason most do not, so it's advantageous to use the one with better legal protections. It's not only about purchase protection/disputes, but liability and timelines when/if someone steals your card info and makes a bunch of fraudulent charges. The more places you use a card, the higher the chance that info will get skimmed or stolen.

Luckily, while behind, most places in the US have moved to tap to pay which helps a lot with POS skimming. But it only takes one bad employee to photo or copy your card info, or one poorly configured webstore, to leak your information and use it for online purchases. My most recent credit card doesn't even have numbers or an expiration printed on it, for that reason.

Re: Capital One to acquire Brex for $5.15B

#285

Post by htrp »

jgalt212 wrote: post #253
pm90 wrote: post #204

Earlier quoted context omitted.

Investors will only invest in AI plays. They don’t seem to care for fintech.

Probably true, but our fintech still gets tons of unsolicited emails from growth equity shops. I don't respond because as you mentioned this sector is out of favor, and as such the multiples are not worth my time.

thats just top of funnel, the instant you respond the terms start to become very very unfriendly

Re: Capital One to acquire Brex for $5.15B

#286

Post by HWR_14 »

irjustin wrote: post #224
paxys wrote: post #13

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

There's a lot of speculation about how different rounds will get paid out. Unless someone has insider information and is willing to post, we have absolutely no idea who was made whole, who lost and/or who gained. At the size of Brex, anything is possible and it depends on how much leverage they had at each priced round. Guaranteed payout, equal, founders multiplier, lead multipier. All possible. Additionally, what pe…

What is a founder/lead multiplier?

Re: Capital One to acquire Brex for $5.15B

#287

Post by zamfi »

neilv wrote: post #222
zamfi wrote: post #198

Earlier quoted context omitted.

These days, most employees getting nothing out of the deal is par for the course for acquisitions, unfortunately. The acquisition price is almost never exchanged directly for shares in the company as implied, often a chunk of it is kept for key personnel retention, etc. Typically just enough goes towards the share purchase to make investors happy, and the rest is structured as incentives for founders and key execs wi…

> Typically just enough goes towards the share purchase to make investors happy, and the rest is structured as incentives for founders and key execs with milestone payouts. So they're getting the employees' shares without compensating the employees? And there's incentives paid to the people who approved the deal, separate from their shares? (I've heard of liquidation preferences, but never by the person making a job…

Yes, and yes. The sibling comment here about liquidation preferences is correct, and these separate incentives are usually structured as retention incentives — eg, compensation for future work with the acquiring company.

Shareholders are of course free to sue the board for acting outside of the interests of the shareholders overall, but this happens very rarely because typically the company would otherwise be shutting down and it’s very hard to make the argument that the deal undervalues common shareholders’ shares.

Re: Capital One to acquire Brex for $5.15B

#289

Post by weird-eye-issue »

Intermernet wrote: post #258
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

That's like asking "what does rent have to do with property prices?". Just because you've managed to be on the top of this perverse social summation of usury doesn't mean it isn't predatory and a net negative for society. Credit cards are one of the most insidious ways that banks extract money from those living closest to the margins of poverty. The benefits you gain are a fraction of the profits gained from raking t…

No it's actually like asking what cars have to do with debt. You can have a car without going into debt just like how you can have a credit card without debt.

Since you have such high moral standards I hope you don't invest in any index funds because lots of companies in those would probably not live up to your standards

Re: Capital One to acquire Brex for $5.15B

#290

Post by vel0city »

pants2 wrote: post #110
thegrim000 wrote: post #99

Earlier quoted context omitted.

It's extremely common advice to not keep large sums of cash sitting in your checking account. With capital one (and others) you can just open a free savings account, keep the bulk in there (if you don't want to invest it instead), which earns an actual interest, and then there's never a "big" amount of vulnerable cash sitting in your checking account. There's free/instant transfers between savings and checking when y…

Not a great solution to constantly have to top up your checking account with some amount between "I need this much to pay my bills" and "losing this amount would devastating" which for many people has quite some overlap

If most of your income comes from salary/wages, just have the paycheck first hit your normal checking account first and then have scheduled deposits from there into savings accounts someplace else. You generally have enough money in the account to cover your monthly stuff plus a bit of buffer, but have the pile of cash elsewhere in case something happens.

This way you're not actively having to top off your normal spending account, but at the same time have a backstop in case that active account gets hit by fraud or whatever.

I'd suggest protecting yourself even further and having those accounts be split across two different banks. This way if one of your bank credentials gets hacked or you have some issue with the bank you at least have a chance of still having an account with cash someplace else to cover the short term.

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