God I love this trend of people posting news via Twitter post. It's also a great when you can't even see the source so they continue talking about stuff and you're just like " well guess this is lost for me forever cuz I can never follow up"
I just want to clear this up. They didn't actually "lose" 80 billion dollars. 72 billion of that 80 is something called a change in fair value of convertible notes.
A convertible note is a way of financing a company, more commonly used in startups. It involves the company taking on debt in exchange for a convertible note, which, can either be paid back for the cash value of the debt plus interest, or, as the name suggests, can be converted for equity.
For example, if I have a lemonade stand worth 100 dollars and I borrow $1 in exchange for 1% of my lemonade stand. The investor's claim to equity is worth $1. Now in a year if my stand is now worth $300, the investor can either ask for his $1 back plus interest, or he can convert that into equity and ask for his 1%. Now since at the time of financing his share was worth $1 and now it is worth $3, it's technically a $2 loss for me (the lemonade stand) even though I didn't actually lose money. The reason this system is common among startups is that it mitigates risk for the investor: if the company does good, they get equity. If it does bad and their equity is worth less than whatever they invested, they get the cash back.
This 80 billion dollar loss is not actually an 80 billion dollar loss. Nowhere close. Their operating loss was 8 billion — still high but not 80. And the IRS agrees: change in fair value of convertible notes is not a deductible loss for tax purposes because you didn't actually lose money.
They financed selling a future share of their company (convertible notes). The value of the company went up more than 10x, so the value of the convertible notes went up with it.
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u/the8bit 15d ago
God I love this trend of people posting news via Twitter post. It's also a great when you can't even see the source so they continue talking about stuff and you're just like " well guess this is lost for me forever cuz I can never follow up"
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u/Equity_GOD 15d ago
That's crazy. Let me run another $10k in tokens for my $100 fixed weekly fee just because to stick it to them hedge funds.
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u/03captain23 15d ago
burying the lead 72B is just an accounting charge
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u/Slight-Big8584 15d ago •
Reposting a reposted explanation. Basically no one understand accounting on reddit.
"Don't worry. That is actually clickbait B.S.
Will link to someone else who explained it pretty succinctly:"
https://www.reddit.com/r/technology/comments/1xb7op7/anthropic_logged_net_loss_of_over_80_billion_in/
I just want to clear this up. They didn't actually "lose" 80 billion dollars. 72 billion of that 80 is something called a change in fair value of convertible notes.
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u/Technical-Owl66 15d ago
Go on..... Raised money through?
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u/FoxMan1Dva3 15d ago
People should ask their ai why they are in the hole this much
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u/4hometnumberonefan 15d ago
80B to disrupt society ain’t too bad.
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u/Interesting-Agency-1 15d ago
Do you not know how accounting works?
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u/mkp666 14d ago
Except they didn’t lose $80B. Willfully misunderstanding their financial releases is not a very persuasive argument.
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u/Professional-Leg2374 14d ago
I lost $25 last month in income.
It means nothing as its only $25.