I don't think that's the right way to think about this situation. The fact that Lee Kun-Hee is dead means that the family's efforts to restructure the company, consolidate power, and offshore assets is complete. Elliot Management called out Samsung five years ago for malfeasance but their efforts were stymied by a government led by the former disgraced president, Park Geun Hye.

If the theory is true, then the fact that they're announcing his death now means that they've finally put themselves in a position where they can pay the tax bill without giving up control of Samsung.

I'd expect them to be able to finance paying the taxes with an equity collateralised loan. If not the entire tax bill, at least a big chunk of it.

Seems that more leverage and more debt is in fact the answer to everything. BRB, need to take a second mortgage to buy more equity index funds. I will then use the fund shares as a collateral for another loan, and you get the idea. I wonder why hasn't anyone thought of it yet! Time for a YC application!

“Debt is morally wrong” is a useful heuristic in the context of working class people, consumption spending, and delayed gratification. In the context of the tax and liquidity challenges of the ultra-wealthy it’s just a tool.

It's only stupid if it doesn't work!

You jest but it could work out. Samsung has more than doubled their share price over the last 4 years. Tripled over the past decade. Additionally you have to consider that retaining the shares may be critical to maintaining control over Samsung. So that would be worth a certain premium. There's still risk, but theres risk in owning any piece of any company.

I don't think zeroing out home equity to buy bonds is a bad idea.

After all, you either have real estate exposure or some other one, bond or equity exposure. While I haven't done the analysis, I would venture to guess that investment grade bonds at the very least have lower volatility than real estate.

Do you think the investment grade bonds are going to yield better than the interest rate on a home mortgage ?!?

Yeah I doubt a bond would pay that well.. but he does have a point about risk exposure. Your mortgage could be thought of as an investment in the local real estate market.. diversifying that risk by buying shares in a REIT could be a good strategy... especially if you're in a low-growth area (ie outside of the big cities, midwest, etc).

Hey, here's a shockingly simple idea: don't buy a home if you don't want equity, rent instead.

There are systematic advantages to having a mortgage vs renting.

Maybe not, but you can easily move into lower grade and higher yield debt depending on the interest rate of your mortgage.

Step 1 - get as many loans, credit card debt, financing etc.

Step 2 - spend all the cash to buy bitcoin

Step 3 - bankruptcy

What happens if they aren't able to sell off the assets at a high enough price to pay the inheritance tax? Does the amount owed scale with how much the assets are actually able to fetch in a mass sell-off like this?

There is absolutely no problem with liquidating a $7B slice of equity in a matter of weeks (probably even days). People don't appreciate just how enormous the capital markets are.

If it is a single stock it may still affect the price. That’s why big sell-offs are usually done over a long period of time, like weeks.

People also don’t appreciate just how small the capital markets are and how much they rely on market makers.

Weeks because you may need an actual human broker to find you counterparties.