Sunday, May 30, 2010

Markets in Everything: Chocolate Bonds

A U.K. chocolate company is offering high-interest bonds where coupon payments are paid in chocolate instead of cash.

4 Comments:

At 5/31/2010 7:59 AM, Blogger David Bryan said...

This will never work. People consistently underestimate their future demand for chocolate.

 
At 5/31/2010 10:49 AM, Blogger juandos said...

"People consistently underestimate their future demand for chocolate"...

Good point!

Consider the following though and the idea of chocolate bonds might take on an added urgency with the baby boomers...

From Science Daily: Chocolate Might Reduce Blood Pressure and Risk of Heart Disease, Research Suggests

 
At 5/31/2010 3:06 PM, Anonymous morganovich said...

this is actually a very clever ploy on the part of the company.

consider:

paying a lender $100 in chocolate is far better for the company than paying $100 in cash. they are giving the lender $100 worth of product that costs less than $100 to make. if they have a 30% gross margin on chocolate, then the real interest rate paid by the company is negative and they are getting paid to borrow money.

very clever.

 
At 6/02/2010 9:46 AM, Blogger Jessica said...

I agree very clever. Regardless of what the actual interest rate is for the company (based on cost to produce product) - this is a great marking. Cool way to get their brand out there. And it's gotten them a mention in the NY Times.

 

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