You purchased a shipping container full of superhero-themed underwear, which is currently en route from China. You spent $2 million for the undies, which you plan to sell to retail stores. While the boat with the underwear on it drifts somewhere in the Pacific, you get a call from a competitor. They are willing to pay you $2.5 million for the incoming shipment. You could book a $500,000 profit without having to do any sales. You say, "sure."
Luckily, you have a negotiable bill of lading. It's the official document for the shipment, detailing all the pertinent information about the cargo, including who is supposed to receive it once it arrives in the U.S.
The "negotiable" part means that whoever holds the official bill of lading can receive the shipment. It isn't a specified person or entity. Whoever has the document gets the undies. So you can sell your bill of lading to your competitor and just let them receive it when it comes. You don't have to receive the shipment yourself and then somehow transport the product to the purchaser. It's just a matter of selling them the bill of lading.
The negotiable bill of lading stands in contrast to a non-negotiable bill of lading. That kind of document lists specifically who can receive a shipment. The shipper cannot give the cargo over to anyone other than the party listed in the bill of lading.
Related or Semi-related Video
Finance: What is mark to market?2 Views
Finance a la shmoop what is mark-to-market?
alright well Google was private for a long time before it went public public [Google timeline appears]
mutual funds bought the shares of the company when it was private, the company
did a few later stage B C and D rounds before going public in 2004 and each
iteration those subsequent rounds valued the company more highly so a mutual fund
invested say 20 million dollars in the B round they would have seen the C round
done at maybe double the valuation and while that mutual fund would then
mark to market or mark up their twenty million dollar investment to now be
worth forty million dollars even though the stock of goog was not yet publicly
traded and then it came along the D round which was done at triple the [D round investment appears]
valuation of the C round so then those shares of goog would have to be again
marked up or marked to the new current market valuation which was three times
the previous rounds valuation of 40 million aka a hundred twenty million
bucks today eventually the company did go public and there was no longer need [Google stock price rises on graph]
to mark its value to the market because well the market valued it basically
every second of the trading day if you want to learn more about all this stuff
well then you can just you know google it
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