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> Owning a stock is never a liability. Never would a stock go negative dollars. I agree that the market isn't currently quite saying that core Yahoo is worth <

> Owning a stock is never a liability. Never would a stock go negative dollars. I agree that the market isn't currently quite saying that core Yahoo is worth < 0, but your logic here is completely incorrect. While of course this is true of an entire share of stock, we're not talking about a literal share of stock being valued at less than zero. Core Yahoo is a subset of what the share represents ownership of, and that subset is what people are claiming is being valued at less than zero. This is quite clearly possible if the expectation is that the subset will use more resources from the overall entity than it will produce (for a trivial example, if we imagine that the subset is worth X billion and you expect it to spend its entire cash hoard of X+1 billion on unprofitable investments, then the subset has negative value). It's far from impossible for the market to value core Yahoo at less than zero; it simply means that it thinks that Yahoo is going to die and on the way it's going to net-squander some of the other resources that are contained within a single share of YHOO. Basic Finance 101.

cscurmudgeon 11y ago
> It's far from impossible for the market to value core Yahoo at less than zero; it simply means that it thinks that Yahoo is going to die and on the way it's going to net-squander some of the other resources that are contained within a single share of YHOO. Even if it does it does not make sense to value it at less than zero. Even if the company kills the entire Panda population nobody is going to go after the stockholder. Why are you ignoring taxes? Repeating an incorrect argument does not make it correct.
- devonkim 11y ago
  I think you're arguing that the financial instrument itself can't be $0 and because of that there's no way for valuation of an entire company to be less than $0. I never argued anything that means that the financial instrument of a stock should be zero or less than zero. I think a company stops being traded entirely if it should fall to zero and enters into bankruptcy to pay off existing creditors. Maybe then stock is converted into something else, I have no recollection of any instrument that represents that owning a stock means you are indebted now. People do go after the stockholder if the holder was trading on margins and the margin call happens from the broker to recoup their losses. But this scenario is really between a broker and a client, not shareholder v. anyone else relationship.

cscurmudgeon 11y ago

> It's far from impossible for the market to value core Yahoo at less than zero; it simply means that it thinks that Yahoo is going to die and on the way it's going to net-squander some of the other resources that are contained within a single share of YHOO. Even if it does it does not make sense to value it at less than zero. Even if the company kills the entire Panda population nobody is going to go after the stockholder. Why are you ignoring taxes? Repeating an incorrect argument does not make it correct.

devonkim 11y ago
I think you're arguing that the financial instrument itself can't be $0 and because of that there's no way for valuation of an entire company to be less than $0. I never argued anything that means that the financial instrument of a stock should be zero or less than zero. I think a company stops being traded entirely if it should fall to zero and enters into bankruptcy to pay off existing creditors. Maybe then stock is converted into something else, I have no recollection of any instrument that represents that owning a stock means you are indebted now. People do go after the stockholder if the holder was trading on margins and the margin call happens from the broker to recoup their losses. But this scenario is really between a broker and a client, not shareholder v. anyone else relationship.