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I don't return the company's cash to investors because CASH IS AN ENTERPRISE VALUE MULTIPLIER Consider valuation in these scenarios * $200m cash, 24mos of runway w/ 0 revenue. * $50m, 6mos, 0 * $10m, 1mo, 0 It's insurance and optionality. It's the ability to play the long game

365

Thank you

. As an investor, I understand perfectly your vision. But if you play long term, you should think to buy back some of your shares.

Jesse Powell

@jespow

Replying to

@temo_ka

I'm not opposed to it but there are usually better uses of capital. As a marketplace business, I prefer to have more stakeholders than fewer. We would have to have an unbelievably strong balance sheet, and the shares would have to be hugely undervalued.

11:56 PM · Mar 19, 2020Twitter Web App

Replying to

and

Yes and unless it's that extreme case, buybacks are mostly fragilizing trades, as they transmute tail risk. Brings higher valuations from the future into the present, and pushes tail risk from the present into the future, i.e. airlines.

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Nathan Black

@sockcymbal

· Feb 12, 2019

Fragility is hidden in things like a central bank reaction function, share buybacks, and strategies that use volatility as a risk input. These are all self-reflexive feedback loops that dampen volatility, but if a policy shock pushes the volatility past some critical point...

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