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MoneyGram Q4 2019 Report

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1 minute ago, princesultan said:

likely because ODL resulted in efficiencies that cost MGI money

right - this is what I was presuming from the reclass.

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Do we know why Ripple initially bought their shares for something like $4+? Do they just not care short term, and are able to forecast that in the long term the savings+revenue will make the stock worth >$4? 

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1 hour ago, princesultan said:

Contra expense is a financial statement classification. Instead of classifying the 8.9m as revenues, they reduced the related revenue account by 8.9m. It's purely classification. The point is, MGI received 8.9m from ripple last quarter. Whether it was classified as revenue or a reduction of their expenses makes no difference to us. We should be concerned about the fact that ripple had to pay them money, likely because ODL resulted in efficiencies that cost MGI money

It's more than "classification" because it could be tax exempt or a tax credit (federal, state or local) can be applied for MGI or even Ripple if it's related to R&D. 

https://www.alliantgroup.com/services/r-d-tax-credit-2/

Edited by Panzer_Kitteh

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1 hour ago, Ryyy20 said:

Do we know why Ripple initially bought their shares for something like $4+? Do they just not care short term, and are able to forecast that in the long term the savings+revenue will make the stock worth >$4? 

I would suggest reading about preferred and common stocks. That will help answer your question. Please, get out of the mindset of a company looking to sell at X price like a day trader in his 40s does from his apartment. A company does this for dividends, ROI, building its ownership stake, PR/marketing, leverage and other reasons. 

Edited by Panzer_Kitteh

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12 minutes ago, Panzer_Kitteh said:

It's more than "classification" because it could be tax exempt or a tax credit (federal, state or local) can be applied for MGI or even Ripple if it's related to R&D. 

https://www.alliantgroup.com/services/r-d-tax-credit-2/

This! @Chris_Reeves I saw you had a twitter post related to this. I'm assuming the classification is relevant given how it affects the taxable income but was hoping you could confirm/provide broader insight into your thoughts?

EDIT: Assuming a lower taxable income is the end result, this would actually increase the amount of capital that could be deployed in other areas, which otherwise would have been a tax hit. 

Edited by Mpolnet

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1 hour ago, Panzer_Kitteh said:

It's more than "classification" because it could be tax exempt or a tax credit (federal, state or local) can be applied for MGI or even Ripple if it's related to R&D. 

https://www.alliantgroup.com/services/r-d-tax-credit-2/

This post makes no sense. 

MGI received 8.9m. This is not subject to r&d credits since they are receiving the money. 

For ripple, whether or not MGI classifies the 8.9m received as a revenue of negative/contra expense makes no difference for ripple being able to potentially claim these expenditures for r&d credits. 

Bottom line: ripple gave 8.9m to MGI likely because ODL wasn’t efficient and resulted in costs. 

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28 minutes ago, princesultan said:

This post makes no sense. 

MGI received 8.9m. This is not subject to r&d credits since they are receiving the money. 

For ripple, whether or not MGI classifies the 8.9m received as a revenue of negative/contra expense makes no difference for ripple being able to potentially claim these expenditures for r&d credits. 

Bottom line: ripple gave 8.9m to MGI likely because ODL wasn’t efficient and resulted in costs. 

It's treated this way because the $8.9MM given to MGI was for the offset of operational cost associated with the funds received hence a contra expense. It actually doesn't lower taxable income since it's a wash. However, what it does is provide an incentive to grow the system since this $8.9MM was likely associated with slippage, thus an offset of expenses rather than revenue. The system needs to grow in order to achieve operational economies of scale, which is typically where cost savings are realized. Helping mitigate the expenses associated with growing the system should be viewed as a positive not a negative. 

Please check out this twitter thread courtesy of @Chris_Reeves

https://twitter.com/MrReeves87/with_replies

Edited by Mpolnet

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2 hours ago, princesultan said:

Bottom line: ripple gave 8.9m to MGI likely because ODL wasn’t efficient and resulted in costs. 

I don’t think that is correct.  Ripple have long said they would subsidise and even reward the early adopters.  That is more likely reward payments in my opinion.  

The also top up any deficit XRP during a transaction if the value move results in less value at the far end...  a pool of XRP is used to top the value back up to agreed amount.  

The inverse is also done if I understand correctly.  So that net movement should not amount to much (if any) most of the time.

Hence my belief that the funds in question are reward incentive amount.   

 

Edited by Guest
Added word ‘not’

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The long and short of all this in my opinion is that it’s way too early to make any conclusion and certainly the above negative ones are just bad guesses and are not likely to be correct in my opinion.  

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1 hour ago, PunishmentOfLuxury said:

Asheesh Birla, Ripple employee, weighs in:

https://twitter.com/ashgoblue/status/1232480844847017985

Thanks for this link @PunishmentOfLuxury. I read it as a vote of confidence—investment—towards building something that is working now but can become better and bigger. And not, as much of the negative commentary here is assuming, to prop up the starting position in the one Mexican corridor. 

Edited by Johno

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2 hours ago, PunishmentOfLuxury said:

Asheesh Birla, Ripple employee, weighs in:

https://twitter.com/ashgoblue/status/1232480844847017985

So yeah...   he confirms my view...   it’s nothing to do with ‘slippage costs’ or ‘operating costs’ or any of the other gloomy views.  

It’s the incentive program they have long discussed and that anyone following Ripple probably should have been aware of. 

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By the way does Ripple have public listed shares? Cause the end of the financial year and public result presentations are next month. If now some of the public listed crypto companies start to buy back their shares this should be a green lamp that the financial report in a few weeks would not be "so bad".

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1 hour ago, hysteriaLover said:

By the way does Ripple have public listed shares?

No.  Private company.

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7 hours ago, Tinyaccount said:

The long and short of all this in my opinion is that it’s way too early to make any conclusion and certainly the above negative ones are just bad guesses and are not likely to be correct in my opinion.  

And also, the sentiment in this forum is exceptionally bad at the moment. You have to be very cautious filtering the negativity out of real facts and of what we know...

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