They're returning the equivalent of 3 million stock options. They gave themselves 11 million stock options between 2017-2020, which means they're still getting around $2 billion for being on the board. They're not returning everything over $1 million at all.
>Do you have an opinion on whether the work they've done is worth $2 billion?
Their market cap went up by 1 trillion.
Again, they were just compensated in equity. It's easy to look back and criticize them as overcompensated but at the time they were just receiving equity worth a fraction of what it is today.
At the time they were getting close to 10-20x more than an typical board member of an S&P 500 company. The lawsuit was brought up before the stock took off.
They were cash strapped and almost bankrupt, the most shorted company of all time and they paid out in equity. They were able to flip it around and become of the all time great success stories, I'd say their directors probably earned their compensation.
While I'm generally pro-HFT and market making, I'm seeing some comments that are equating market making and high frequency trading. They're not the same thing. As an HFT firm, you can have two kinds of strategies: Liquidity providing and liquidity taking. This article calls these two strategies market making and "being an aggressor" in the "Strategy Zero" and "Survival!" sections. The HFT describes their aggressor strategy as follows:
"Mr. F., one of the original hires, coded what we called Strategy Zero. It was simple: have no position, wait for an option edge of a reasonable size, at least a tick. Then, hit it. Wait. Dump it out and take a tick profit."
In this case, the strategy involves 1) seeing that you can buy a security at $10, 2) knowing that the security is actually worth $10.01 and will move to this price in a few seconds, 3) lifting someone's $10 offer, 4) waiting the few seconds for the market to move, and 5) hitting someone's $10.01 bid for a $.01/share profit.
This liquidity taking strategy is not similar to a liquidity providing strategy. Liquidity providing is leaving orders on the order book for anyone to take and gaining money from one person who buys your shares for $10 and from another who sells shares to you at $10.01. This involves more risk to your business.
I think that if you want to debate the merits of whether working at an HFT firm is an actually useful service, you have to look at how often the HFT firm provides liquidity versus takes liquidity. Providing liquidity more obviously tightens spreads and improves prices, as you can't be a successful liquidity provider unless you provide the best prices first. Liquidity taking, however, involves lifting orders from exchanges that you know are incorrectly priced, which seems to me like a more obvious "bad" (or at least less good than liquidity providing).
> Liquidity providing is leaving orders on the order book for anyone to take and gaining money from one person who buys your shares for $10 and from another who sells shares to you at $10.01.
I think you have that backwards. If you always sell at $10 and buy at $10.01 you lose on every trade.
I'd argue that hiding behind "we let the market determine it" is much more uninspired and unproductive. Economic research now a days is constantly showing that markets are extremely flawed. One example of that is society pressuring employees to not share their wages, which is exactly what this whole article is about.
Honestly I get lost inside of AWS. Only recently was I able to figure out why I was getting charged $.82/month which, in the long run, is really nothing. But it's amazing how hard it was to figure out why I was getting charged for something that I originally thought was just going to be free.
Scarcity alone is definitely not enough to create value. The one piece of artwork I've made in my life is a scarce resource, but that doesn't mean I have people buying it up like its an NFT.
This is true, you need demand too. But NFTs make scarcity possible in a domain in which it was not possible before (digital art, for example). You have demand from collectors and speculators who want to create a market for "scarce" digital art. You have supply from creators who are quite happy to meet that demand. And you have NFTs, a way to make digital art scarce (for some definition of scarce.)
Maybe some people believe that, but overall that seems to be more of a straw-man argument if anything. I believe what is more common is the thought that we, as a country, can provide housing for people who have no place to live without making a large impact on tax payers below the upper class. Or is this naive in your opinion as well?
It’s innumerate I would argue. There are a lot of “ought to be” aspects to life but it’s not a very useful layer of thought. I prefer thinking about “what is” and from there think about changing things for the better. By “what is” I’m referring to empiricism, collecting data and using numbers to facilitate reason. The two modes, what ought to be vs what is, needn’t be incompatible, though acceptance is a difficult first step for many. In any case, if there is solid empirical evidence for the yimby-topian fantasies I hear, about how mixed used shopping plazas will solve the worlds ills, literally, I’ve yet to be convinced by any of it but I’d love to read any studies you might provide.
Public policy constantly requires leaps of faith to try to make the country better. You can't know that providing housing to the homeless helps them until you actually try it for the first time.
What is: Based on currently available numbers, there are about 59 vacant housing units for every homeless person in the U.S.[1]. We do not have a shortage of houses, but instead a shortage of desire to house the homeless.
What makes you think we, as one of the most powerful countries in the world, cannot provide housing to the homeless?
Also, if you want to actually have a conversation about this, I would appreciate if you don't belittle my comments.
I agree that vacant units, and units that are unsafe due to lead, asbestos, etc... are a very real problem and a good target for public policy. I think the idea that I often hear, that we can build new homes until rents are so low it decreases homelessness, to be a poorly thought out idea. To see a good example of how it turns out, look at San Jose’s new google village. Homelessness increases while the developers and google get rich, and the public get a few hundred “low income” studio apartments that if they don’t sit vacant will end up renting to the googlers who are the only ones who can actually afford the $3000 “low income” rent, for example.
For that kind of price at an internet cafe, which may be outdated info anyway, you'd probably just get a chair at a shared table. The reclining chair and a little private cubicle would be quite a bit higher for an entire night, probably comparable to hotel rates. A shelter or youth hostel would be better.
1) Many times, yes. If we want to analyze things logically, oftentimes people just need a safe place to stay so that things are stolen from them/they can avoid drugs/they can tell an employer that they live somewhere in order to have a more stable life.
2) Even if they don't suddenly get their life together, that is looking at things too logically in my opinion. In my opinion, it is the moral thing to help out the needy, and that means providing housing. America's big enough to do it.
> 1) Many times, yes. If we want to analyze things logically, oftentimes people just need a safe place to stay so that things are stolen from them/they can avoid drugs/they can tell an employer that they live somewhere in order to have a more stable life.
This ignores the obvious - that people who have start off with a safe place to stay end up on drugs and homeless.
When I consider what I have observed about trauma - I do basically agree that a safe place is part of the solution, but you are also looking at half a decade or more of support and recovery time in addition.
> There would almost surely be a censoring effect no matter what age cutoff you pick
This seems to be an ethical argument to make the age cutoff 0: in other words, medicare for all.
> surely at some level health econometricians are involved in this type of policy and are aware and facilitate whatever trade-offs are being sought.
I feel like this article would not be massive news if this was true. The other case I recall that would be like this is when oil execs held back info that they were causing climate change. That seems to me to be completely different, however, because that was a private company and we're talking about government employees here.
I don’t see any reason your comment would be accurate. It all depends on trade-offs. If the goal is to reduce cost, then you could equally argue to get rid of medicare entirely.
Clearly the goal (no matter what anyone’s separate normative opinion is) is to balance some complex tradeoff between costs borne by tax payers, costs borne by corporations (through taxes and through employer based healthcare for working age adults and their dependents), and a high level of access for all people.
Nothing about this censored data effect can say anything about the morality of different regions of that trade off space.
As to your second comment, this article is not massive news and it seems laughable to say it is. It’s just a blip in the news cycle, using some data artifact to drum up attention to something that is already well-known for any econometrician or health policy analyst.
Full disclosure: I personally favor nationalized medicine and welcome higher taxes across the board. Nonetheless I don’t find your comment to be accurate or valuable.
https://www.reuters.com/legal/tesla-directors-settle-lawsuit...
Do you have an opinion on whether the work they've done is worth $2 billion?