Comment by lukeify
5 hours ago
A company can either generate a small new revenue stream from on-selling old gear, or they can pay to destroy and dispose of it.
Which option is a profit-oriented, not-totally-profitable AI outfit going to choose?
5 hours ago
A company can either generate a small new revenue stream from on-selling old gear, or they can pay to destroy and dispose of it.
Which option is a profit-oriented, not-totally-profitable AI outfit going to choose?
Well, if they were bought on credit, and must be returned when you go insolvent to the company that makes the chips, whose market - and therefore stock - would collapse in value should the market be flooded with used equipment, and said company already dealt with a similar situation in the past few years... I think the answer is obvious.
Liquidators aren't going to care about "the market", they will try and get in first and profit on on-selling equipment at a lucrative price.
I don’t think you got the point. The liquidator in this case is highly incentivized to keep these off the market
People seem confused here, but liquidation is very common. That's what private equity often does. It's also why debt collectors call non-stop, even if they are calling the wrong person (fuck you AI debt collectors!). They buy up the debt for pennies on the door and the original debt owner writes off a loss on their taxes. It's also the reason how I bought a Herman Miller for 40% retail.
It's very simple: some is better than none
I am not sure that it would be profitable to sell equipment that has been depreciated to 0$.
Clothing companies destroy unsold stock all the time.
Clothes are typically too cheap to liquidate. And how does Nike liquidate a Nike branded shirt. The buyer would need to remove the logo.
Clothing companies do typically put items on sale first. They'll even sell "at a loss"