🦔SoftBank just borrowed $10 billion using its OpenAI stake as collateral to buy more OpenAI stock. A consortium led by Goldman Sachs and JPMorgan arranged the loan at 7.88%, nearly triple what a margin loan against public stock would cost. The banks couldn't independently value the collateral because OpenAI is private and its shares don't trade, so SoftBank had to add corporate guarantees to close the deal. SoftBank has now committed $65 billion to OpenAI. The company holds $135 billion in total debt. My Take The banks that arranged this loan know what they're taking on. A normal margin loan against public stock runs closer to 2.5%. This one costs 7.88% because if OpenAI's valuation drops, there is no exchange where the banks can force-sell the collateral. Secondary market data already shows five sellers for every buyer of OpenAI stock, and that stress shows up in the loan pricing. Half of everything Masayoshi Son borrowed now sits on one private company that has never turned a profit. This is the same investor who put $18 billion into WeWork before that valuation dropped from $47 billion to $8 billion. Banks like Goldman and JPMorgan don't hold this debt on their own books for long. They package it into structured products that pension funds and insurance companies buy without visibility into the collateral terms. Hedgie🤗