Brent has left PWCC

[Peter_Spaeth]

Originally Posted by Oscar_Stanage

The loans were ultimately made to customers with cards in the vault. The way asset based lending works, there is a steep haircut relative to the card price. If a customer had $100k market value of cards in the vault, they were likely only able to borrow $60k, maybe less. It’s unclear to me what exposure PWCC had as a firm. The hedge fund provides the capital for PWCC to tap for lending. If the borrower defaults, PWCC simply sells the cards in possession and pays back the hedge fund. In all likelihood , the hedge fund is the direct counterparty to the customer and PWCC simply stands in the middle and collects a fee with no risk. The beauty is that PWCC holds the assets, so the only risk to the hedge fund is that the price falls below the haircut value.

And yet everyone talking about this seems to agree PWCC had huge debt and was taken out by Fanatics at a token price. What else could account for that debt if PWCC had no risk in thesa nonperforming loans?