Posted By:
warshawlawAccording to its press release, Mastronet did $11 million in the April auction. Invoices went out on April 24th and call for payment within two weeks, so by May 8th. I would assume that the vast majority of bidders were notified by internet and got their money in faster, but for sake of conservative analysis, let's say that only 80% of the money came in on time. That means that by May 8th, Mastro had about $8.8 million in proceeds in the bank. My lousy little money market account with my commercial bank earns 1% a year. Even at that crappy yield, Masto would earn $241.10 a day on the $8.8 million. They will have held the money about 25 days overall, perhaps a bit more, resulting in interest income of about $6,000. Do four times that in auction volume each year (as Mastro does) on the same terms and you drop $24,000 to your profit line with zero risk and zero cost. Nice set-up if you can swing it, no?