Or at least -some- sort of suggested mechanism by which that opportunity could and would have been exercised.
"They could have invested better" - sure, they probably could have. However, there is no reason to believe they -would- have invested in a way that better serves their customers (or whatever 'better' means, that isn't just maintain the status quo), given they never have shown any inkling to do so in the past. Given no proposed catalyst to cause a change on their part, there is no reason to believe they would have changed; ergo, this particular change's leading to 'better' results equals a better outcome than this change not having occurred.
I don’t think that would have brought happiness to the shareholders but otherwise I guess they could have pursued a low-growth strategy. That does kind of open the door to being leapfrogged, though.
It would have been more palatable if they had reduced margin available to new accounts, or even stopped allowing new accounts for awhile. That would have been a black eye for them but much less severe than what they did instead.
No it wouldn't have. The company would still be solvent and have a large number of total deposits, just less in total than they could've had otherwise. What they did literally destroyed the entire company; not doing so would not have had that result. The outcomes are not comparable.
They had a customer base that would knife them at the first hint of a liquidity issue, then they had a liquidity issue. Of course a different approach would have reduced their returns, but then they’d still be in business.
Maybe. Those are not clearly indicated as mistakes either (i.e. the article does not demonstrate or even argue that another choice would more likely than not have led to a better outcome).
And the article conveys some justification for the choices that did get made. For example, they couldn't use certain "second tier" Ethereum features because they aren't approved in states like New York? So maybe you argue that such features should have been used to save on gas fees, but then you're optimizing for a different outcome -- the outcome where you don't win the auction. With the benefit of hindsight, sure, but the leaders didn't know before the auction that they would lose. So it was certainly a reasonable choice to take the approach that seemed most likely to raise the most money.
Yes, that's my point. The company "didn't do well" by the standards of the previous round they raised. But had they raised a round that valued them more appropriately, they may have "done well".
I'm more of the opinion that if the existing customers were concerned enough, they could have found a better solution. Forming a consortium doesn't seem too far off. Of course now i'm speculating with somebody else money, but I also believe somebody run the numbers. Strategy is basically about running numbers continuously about every possible scenario.
I see it the other way. What if Kodak hadn't wasted money trying to enter businesses like digital cameras and printers - ie. low-margin products where Kodak had no competitive advantage. Sure, Kodak would have still gone out of business but it wouldn't have wasted so much shareholder capital in the process.
They could have stopped offering the very high savings yields that attracted that capital, but profits and exec comp would have dipped. So...this instead.
It definitely would have happened regardless, but this sure gave them a good reason to invest more. The straw that broke the camel's back, you could say.
They had other choices - they could have lowered the interest rate they return to account holders as more and more deposits came in. They could have lowered their profit guidance to shareholders instead of taking actions that wiped them out.
As I understand it, the reason they failed is because they gambled on interest rates staying low and chased returns to maximize profits to shareholders.
Shareholders deserve to lose money when they are pushing - or even remaining silent on - increasingly risky corporate behaviors as absentee owners.
This seems like a pretty big misstep for which any sensible person could've predicted the outcome. Companies should think twice before deciding to retroactively change their terms.
Applying public pressure towards companies is good.
In this case the business advantage may simply have been that it was much easier to avoid following the rules while growing from its start 2017 to (at times) > $50B in holdings. They simply didn't care enough to devote the resources needed, i.e., apathy (and even antagonism) towards the normal business protocols.
That's assuming it wasn't done for less honest purposes.
"They could have invested better" - sure, they probably could have. However, there is no reason to believe they -would- have invested in a way that better serves their customers (or whatever 'better' means, that isn't just maintain the status quo), given they never have shown any inkling to do so in the past. Given no proposed catalyst to cause a change on their part, there is no reason to believe they would have changed; ergo, this particular change's leading to 'better' results equals a better outcome than this change not having occurred.
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