> ## Content Index > Fetch the complete content index at: https://the-financial-darwin-awards.ghost.io/llms.txt > Use this file to discover other available public pages before exploring further. # Zero percent is not free, and down 1.6% is not up. - URL: https://the-financial-darwin-awards.ghost.io/zero-percent-is-not-free-and-down-1-6-is-not-up/ - Published: 2026-09-16T14:00:24.000Z - Updated: 2026-09-16T14:00:23.000Z - Description: A lender told its shareholders it did not need to become a bank and lost 23.43% anyway, a company borrowed a billion dollars at a 0% coupon and fell 9.81%, and an arcade chain called a 1.6% sales decline an improvement. The 10-year closed above 5% for the first time since 2007. - Author: Bryce Chandler | GM. This is **The Financial Darwin Awards**, rounding up the internet's biggest Ls so you don't make them yourself. The Fed decides at two this afternoon. Yesterday the market got on with repricing anyway. The 10-year closed above 5% for the first time since 2007\. Three numbers underneath that turned out not to mean what they said. **Three people lost $72,537 between them.** Each of them read a headline figure and skipped the price attached to it. The traders are composites. The moves are not. Here's what we've got today: ๐Ÿฆ"The bank deal is basically done." The application was withdrawn.๐Ÿงฎ"They borrowed a billion at zero percent." Somebody pays that coupon.๐ŸŽฐ"Comps are improving." Down 1.6% is still down.๐ŸคฃDumb memes from the trenches. ๐Ÿงจ THIS WEEK'S DAMAGE REPORT ๐Ÿ“Š $73KLost This Week5.006%The 10-Year, Highest Since 2007โˆžLessons Ignored The first number is the sum of the three stories below. The second is real: the 10-year closed Tuesday at 5.006%, up 4.5 basis points and past its 2023 peak. ๐Ÿ† DARWIN AWARD OF THE WEEK ๐Ÿ† Every issue we crown the single worst financial decision on the internet. This week it goes to a man who owned a lender for a reason the lender told him not to care about. Here's the setup. u/cheap\_deposits\_incoming owned 700 Enova shares, about $158,704, at Monday's close of $226.72. Enova lends to people banks will not. It funds those loans in the credit markets, which is expensive, and it had a plan. Late last year it agreed to buy Grasshopper Bancorp for roughly $369 million. A bank charter would have let it fund those loans with insured deposits instead. For a lender that is not a nice-to-have. The cost of money is the raw material, so the charter was most of the thesis. On Tuesday Enova withdrew its applications to the Office of the Comptroller of the Currency and the Federal Reserve Board. A coalition of state attorneys general had urged regulators to reject it. Chief executive Steve Cunningham said the process lacked clear standards for nonbanks and was open to political pressure. He also said this, which is the part worth reading twice: *"Our future growth and success do not depend on becoming a bank."* Enova reaffirmed guidance the same morning: third-quarter revenue growth around 25%, adjusted earnings growth around 30%, and an accelerated buyback. **Enova closed at $173.61, down $53.11, or 23.43%.** 700 shares, down $53.11 each, is $37,177. **The business did everything it promised. The 23% came out of a licence that never arrived.** ![Brokerage screenshot: 700 Enova International shares held long from $226.72, position down $37,177.00, after ENVA closed at $173.61, down $53.11 or 23.43 percent, when the company withdrew its regulatory applications to acquire Grasshopper Bancorp.](https://storage.ghost.io/c/b6/c5/b6c5cfe6-f565-407b-a985-6ed38723f0e5/content/images/2026/09/1-6.png) C u/cheap\_deposits\_incoming r/stocks โ€ข 5h ago Owned a lender for the bank deal. The CEO says they never needed the bank. *"I was long the funding cost. The funding cost needed somebody else to sign."* \['โฌ† 11.9k ๐Ÿ’ฌ 3.2k ๐Ÿฆ withdrawn'\] Here's the thing. When a valuation rests on a pending approval, the position is not in the business, it is in a decision taken by people who owe you nothing. That is the part worth understanding, and it cost him $37,177 to learn that a nine-month-old application is not a licence. **Why a bank charter is worth so much to a lender, stated plainly:** A nonbank funds its loans by borrowing wholesale, at a spread over market rates. A chartered bank funds them with insured deposits, which are cheaper and stickier. Same loan book, different cost of money. ๐Ÿ’€ THIS WEEK'S CASUALTIES ๐Ÿ’€ Not everybody can be Darwin Award of the week. These two also took a number at face value. Casualty #1: The Man Who Read A Coupon u/zero\_percent\_is\_free owned 300 Axon Enterprise shares, about $147,054, at Monday's close of $490.18. On Tuesday Axon announced a proposed offering of $1.0 billion of convertible senior notes due 2031, with a further $150 million option for the underwriters. The coupon is zero percent. He read that as free money, on the day the US government was paying 5.006% to borrow for ten years. It is not free money. A convertible is a bond plus a call option on your own stock, sold to the lender. The coupon is zero because that option pays for it, and the shareholders are the ones who wrote it. Axon knows this. It plans to spend part of the billion on capped call transactions, buying back some of the dilution it has just sold. **So the money costs an option and then some cash. It is free only in the interest line.** **Axon closed at $442.08, down $48.10, or 9.81%.** 300 shares, down $48.10 each, is $14,430. ![Brokerage screenshot: 300 Axon Enterprise shares held long from $490.18, position down $14,430.00, after AXON closed at $442.08, down $48.10 or 9.81 percent, on a proposed $1 billion offering of zero percent convertible senior notes due 2031.](https://storage.ghost.io/c/b6/c5/b6c5cfe6-f565-407b-a985-6ed38723f0e5/content/images/2026/09/2-6.png) Z u/zero\_percent\_is\_free r/investing โ€ข 3h ago They borrowed a billion dollars at zero percent and the stock fell 10%. *"I thought the company got the money for nothing. I was the one lending it."* \['โฌ† 8.7k ๐Ÿ’ฌ 2.6k ๐Ÿงฎ 0.00%'\] Here's the thing. A financing cost that does not appear in the interest line has not been avoided, only moved somewhere the income statement does not show. That is the part worth understanding, and it cost him $14,430 to learn that the cheapest coupon in the building was being paid in his shares. **How a zero-coupon convertible actually works, stated plainly:** Buyers accept no interest because the note converts into shares if the price rises enough, so they are paid in upside rather than cash. Issuers often spend part of the proceeds on a capped call to buy some of that upside back. The interest line reads zero, the cost sits in the share count. Casualty #2: The Man Who Bought The Second Derivative u/the\_trend\_improved owned 13,000 Dave & Buster's shares, about $110,110, at Monday's close of $8.47. His case was a sentence from the company. Comparable sales fell 1.6% in July, against a 5.0% decline in June. The quarter as a whole came in at minus 2.9%. That is a real improvement, and it is also still a decline. He bought the direction and ignored the sign. Then the quarter arrived. Revenue of $544.1 million, down 2.4% and short of the $556.8 million expected. Wall Street wanted a 19 cent profit. The company posted an adjusted loss of 27 cents. **Dave & Buster's closed at $6.86, down $1.61, or 19.01%.** 13,000 shares, down $1.61 each, is $20,930. ![Brokerage screenshot: 13,000 Dave and Buster's shares held long from $8.47, position down $20,930.00, after PLAY closed at $6.86, down $1.61 or 19.01 percent, on a surprise quarterly loss of 27 cents a share against a 19 cent profit expected.](https://storage.ghost.io/c/b6/c5/b6c5cfe6-f565-407b-a985-6ed38723f0e5/content/images/2026/09/3-6.png) T u/the\_trend\_improved r/wallstreetbets โ€ข 1h ago Bought it because comps improved from down 5% to down 1.6%. Both numbers start with down. *"I was watching the trend get better. The level never got above zero."* \['โฌ† 10.3k ๐Ÿ’ฌ 2.9k ๐ŸŽฐ still down'\] Here's the thing. A rate of change tells you about momentum and nothing about position, and a business can improve every month while running out of money the whole time. That is the part worth understanding, and it cost him $20,930 to learn that less bad is a direction, not a destination. **Why an improving decline is still a decline, stated plainly:** Comparable sales measure the same stores against a year earlier. Going from down 5.0% to down 1.6% means the hole is being dug more slowly, not filled in. Until the number crosses zero the base keeps shrinking, and next year is measured against the smaller one. ๐Ÿ“Š THIS WEEK BY THE NUMBERS ๐Ÿ“Š We track the data because the data is funnier than anything we could invent. ๐Ÿฆ$369Mthe bank deal Enova walked away from๐Ÿงฎ0%the coupon on a billion dollars of new notes ๐ŸŽฐ\-$0.27an adjusted loss where 19 cents of profit was expected๐Ÿ“ˆ5.006%the 10-year's close, past its 2023 peak **The S&P 500 fell 0.45%, its sixth decline in seven sessions, with the Russell 2000 down 0.86%.** Small caps borrow at the short end, which is exactly where the repricing has been happening. ๐Ÿช BITE-SIZED COPIUM FOR THE ROAD ๐Ÿช The best part of any loss thread is the comments. โ€ข **"The application was filed nine months ago."** Filed is not granted. (u/filed\_nine\_months\_ago) โ€ข **"They borrowed a billion at zero percent."** You are the lender. (u/zero\_coupon\_zero\_cost) โ€ข **"Comps improved from down 5% to down 1.6%."** Both of those are down. (u/comps\_are\_improving) Translation: three numbers read forwards, none read for what it cost. ๐Ÿคฃ DUMB MEMES ๐Ÿคฃ Ours hits different when the number was right there. ๐Ÿฆ โžก๏ธ ๐Ÿ“‰ ๐Ÿ˜ญ the charter, the withdrawal, the holder POV: the CEO says you never needed the bank ๐Ÿงฎ ๐Ÿ’ธ ๐Ÿ’€ zero percent, somebody pays, it was you u/zero\_percent\_is\_free, reading a coupon If you laughed, you're coping. If you didn't, go and find the number in your thesis that nobody has signed off yet. **See you next issue.** Zero percent is not free. Down 1.6% is not up. Traders and P&L screenshots are satirical composites. Market data, company statements and price moves are real and dated September 15, 2026\. Not financial advice. **Stay liquid,**The Financial Darwin Awards | | 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