Prof G Markets: Virgin Galactic is Going to Zero, Stock as Collateral + Instacart & the IPO Market

Stock Collateral

Amazon's innovative stock-as-collateral mortgage program, developed with Better.com, allows employees to use their stock for home loans. This program, called "Equity Unlocker," offers a unique benefit by protecting against margin calls, although it requires pledging stock worth twice the down payment. Scott Galloway explains that this initiative incentivizes employees to retain their stock, viewing it as a tangible benefit 1.

It's seen as a benefit, right? I work with a company where I can use my stock as collateral for a down payment on a house.

--- Scott Galloway

He notes that while the program offers advantages, it also involves higher interest rates, making it a strategic bet on Amazon's stock performance 2.

   

Strategic Mindset

Scott shares his perspective on the strategic mindset behind leveraging stock as collateral, emphasizing the importance of diversification. He highlights the potential risks of concentrating both human and financial capital in one entity, especially as one ages 2.

Never sell, just borrow against your stock. Let the stock continue to grow.

--- Scott Galloway

Scott also reflects on his personal investment in Better.com, noting the company's vision to streamline mortgage processes through technology, which could reduce costs for consumers 3.

   

Mortgage Insights

Scott discusses his personal experiences with mortgages, revealing insights into the changing landscape of interest rates. He recounts advice from his financial advisor about refinancing due to rising rates, contrasting past low rates with the current environment 3.

It's no longer just cheap free money. It used to be borrow as much as you could.

--- Scott Galloway

Scott's reflections underscore the evolving nature of financial strategies and the importance of adapting to market conditions.