Caitlin McCabe

Or do they want to strike a deal with an investment firm that's willing to give them a fraction of their money today?

So what we're seeing is sort of the latest iteration of this kind of fun and esoteric corner of finance where essentially investment firms will buy the rights to money that another party is owed.

Companies that paid millions and millions of dollars in tariffs are facing this crucial decision right now.

Do they want to potentially wait years for this refund process to play out after the Supreme Court decision that we got last week?

Or do they want to strike a deal with an investment firm that's willing to give them a fraction of their money today?

Okay, that makes sense from a company perspective.

But how do investment firms stand to make money here?

So basically what they're doing is they're paying pennies on the dollar today in hopes that they will make a full dollar, if not more, down the line.

And I think that's the big question right now is...

How will this process play out?

In its ruling, the Supreme Court didn't weigh in on whether the government would have to pay refunds on the tariffs, but essentially they're betting, we think that this is going to happen.

We think that companies will get refunds.

And so we'll just pay a fraction of that today in hopes of a bigger payout down the line.

And so even months ago, we saw investment firms buying up these claims.

They were trading in the teens, got as high as around 20 to 22 cents based on what I was hearing.

And then when the Supreme Court decision came out last Friday, that nearly doubled from what I'm hearing in the market.

Now these claims are trading around 40, 40-ish cents on the dollar.

And effectively, that means that investment firms have to pay a whole lot more because there's a little bit more certainty here.

That's what they're wagering.

Again, none of this is guaranteed, but they're thinking, you know, if this market continues to go in this direction, better to lock in 40 cents rather than 50 or 60 or even higher.