Is It Time Again To Talk About Kyle Bass’s Thing for Nickel?

It seems like Kyle Bass is extra bullish on nickel. And we’re not talking about his tweet on the short squeeze.

As the price of nickel hit an all-time high this week, one can’t help but be reminded of how Bass, founder of Dallas-based Hayman Capital, bought $1 million worth of nickels in 2011.

It’s unclear what motivated his decision to hoard 20 million 5-cent coins. He believes that each coin has 6.8 cents worth of metal at the time he bought them, and since he acquired them at face value, there’s no downside risk with the coinage. Basically, it’s good as currency with deflation, and it’s good as a commodity with inflation. 

The problem? It’s illegal to melt US coins.

What’s more is that it costs money to keep a hoard this size. 20 million nickels weigh 220,462 pounds, and take up a lot of space. According to Michael Lewis in his 2013 book Boomerang, where the investor’s nickel collection was first discussed, they’re “piled up on giant wooden pallets in a Brink’s vault in downtown Dallas.”

His nickel fascination was a conundrum then, and it’s a bigger conundrum today as prices soar to new heights. What’s the plan, then? Is there a plan?

When he was asked by the Federal Reserve why he wanted $1 million worth of nickels — of course they had to look into this vastly unusual order — all he said was “I just like nickels.”


Information for this briefing was found via the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

One thought on “Is It Time Again To Talk About Kyle Bass’s Thing for Nickel?

  • March 18, 2022 4:23 PM at 4:23 pm
    Permalink

    Is it illegal to melt us coins, in canada?

    Reply

Leave a Reply

Share
Tweet
Share