"“I’m already at peace with the idea that I’m going to go bankrupt,” said Larry Ionescu, who owns 98 Chicago taxi medallions."
That's how much again? 30Million?
If you manage to go bankrupt with this kind of equity you're bad at business. Like, really bad.
The best investors know when it's a good time to go into a business, but also when it's time to disinvest. Looks like the time is now (or maybe, 6 months ago)
The problem is that pretty much everyone realised the problem at the same time. In order to disinvest there would need to be people willing to buy, but in this case it seems his assets became unsellable pretty much overnight. It's not like Uber was always certain to win; for a long time there were plenty of people who thought Uber would be legislated out of business. Now it's looking like that won't happen. Consequently his position is sensibly pragmatic - his business is failing and he has no way to get back much of his money.
The best investors realise that there is always a possibility of that happening.
"The best investors realise that there is always a possibility of that happening."
Exactly. Especially with things that are very dependent on legislation.
This is not a material asset, it's a license. Cities might one day legislate a medallion is not needed anymore, or increase their number, or change the rules in some way.
Even if he owned all 98 medallions outright, once he started selling them en masse, the price would drop just like a stock. Those are extremely illiquid assets so the price for 1 or 2 is different for all 98.
That's how much again? 30Million?
If you manage to go bankrupt with this kind of equity you're bad at business. Like, really bad.
The best investors know when it's a good time to go into a business, but also when it's time to disinvest. Looks like the time is now (or maybe, 6 months ago)