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In finance, a haircut is the difference between the current market value of an asset and the value ascribed to that asset for purposes of calculating regulatory capital or loan collateral. The amount of the haircut reflects the perceived risk of the asset falling in value in an immediate cash sale or liquidation.
Customers have had a mixed response to the plan, with many expressing disappointment that FTX's demise caused them to miss out on a strong rebound in crypto prices since the market bottomed out in ...
In connection with an investigation into the SEC's role in the collapse of Bear Stearns, in late September, 2008, the SEC's Division of Trading and Markets responded to an early formulation of this position by maintaining (1) it confuses leverage at the Bear Stearns holding company, which was never regulated by the net capital rule, with leverage at the broker-dealer subsidiaries covered by ...
Silvergate offered a payments network that allowed customers to exchange U.S. dollars between accounts 24/7 to match the liquidity needs of the crypto market. The bank suspended the offering last ...
Such recapitalizations are executed via issuing bonds to raise money and using the proceeds to buy the company's stock or to pay dividends. Such a maneuver is called a leveraged buyout when initiated by an outside party, or a leveraged recapitalization when initiated by the company itself for internal reasons.
The crypto lender BlockFi, which was affiliated with FTX, announced on 10 November that it was suspending operations as a result of FTX's collapse. [71] Bankman-Fried resigned as CEO and was replaced by John J. Ray III , a corporate restructuring specialist who previously oversaw the liquidation of Enron .
Closely related to leveraging, the ratio is also known as risk, gearing or leverage. The two components are often taken from the firm's balance sheet or statement of financial position (so-called book value ), but the ratio may also be calculated using market values for both, if the company's debt and equity are publicly traded , or using a ...
Diagram of a dividend recapitalization where debt is issued to pay a dividend to shareholders. A dividend recapitalization (often referred to as a dividend recap) in finance is a type of leveraged recapitalization in which a payment is made to shareholders.