[rpvnwnkl]

They are out 200k. They bought for 100 too much and will have to sell for a 100 less than planned.

[marcinzm]

Not sure I follow. They buy for 1m so they're out 1m. Market value is irrelevant when bought. They sell for 900k, optimally, so they then get back 900k. In total they're out 100k (900k minus 1m). Not counting fees, market movement and assuming they sell optimally.

[rpvnwnkl]

lol yes I’m not sure what I was thinking. Thank you.

[sokoloff]

No, they bought for $1000K and sold for $900K. You can’t count the spread twice.

[cwilkes]

The spread kind of can be counted twice: if you tell management “we’re going to make $100k (10% return) in profit this year” and you end up paying $1000k and selling for $900k instead of $1100k like you planned … management is going to be less than pleased.

They fronted you $1M with the expectation they would make $100k. Now they are losing $100k. So their own projections are screwed by $200k.