It's like credit cards loaning money to people who are unemployed and will default on payments. It's a risky business that is legal and can be very profitable, but may also be disastrous in the future.
reply>It’s nuts that this type of financing is legal.
replyYou need people to burn in house fires for regulation to require extinguishers.
We're going to be the next generation’s cautionary tale.
I don't see the problem as long as materially significant transactions by publicly traded companies are properly disclosed to investors. If someone loses money by buying NVDA then they have only themselves to blame.
replyThis is Jeremy Irons' argument in "Margin Call" too. But most people were unhappy with the secular result.
replyTuld wasn't wrong. There will always be financial bubbles and misallocation of capital. It can't be prevented, and even trying to prevent it would involve intrusive government overreach that would make most people even more unhappy. Investors who want safety are free to buy Treasuries.
replyIt is legal because Jensen isn't selling drugs, payday loans are legal too!
replyIt’s legal because both sides have armies of lawyers and are voluntarily entering into contracts where each party gets consideration.
replyHow someone can compare the above situation to a person getting a payday loan to put a roof over their head or food on their plate is beyond me.
The “it’s like <insert wild and inappropriate analogy to stoke emotion>” is a tired trope.
Come on, calling a round of vendor financing (which is what the NVIDIA money is) "funding" is eggregiously misleading. The only new money entering the sector from this is SoftBank's stake.
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