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Well, yes. That's the entire point of a corporation.
by gozur88 9y ago
Well, yes. That's the entire point of a corporation.
- joshuas 9y agoYou're only a slave to voting shares. We're about to watch this play out with Snap.
- dancole 9y ago"The idea that all of the world should be measured in dollars to stockholders is actually a relatively new idea. It used to be that we thought that businesses had their purpose. Your purpose was to be making newspapers or fountain pens or whatever. And now we act as though the only purpose of a business was to enrich the people who trade it on Wall Street… Of course you’ve got to have profit, of course you’ve got to support your ownership. But that’s not why we’re doing it. We’re doing it because publishing a newspaper is a crucial thing to be doing." ~Andy Barnes Companies use to be temporary, created for the public good (like building bridges) and did not exist to make a profit.
- refurb 9y agoSounds like a great quote, but when exactly were businesses just about "making stuff"? Look at the Hudson Bay company back in the 1600's. That was about profit, not making stuff. And what is this "we act as though the only purpose of a business was to enrich the people who trade it on Wall Street"? No, the purpose is to make profit for shareholders, including the average everyday Joe with a 401k or pension.
- gozur88 9y agoHow many centuries ago was that? Do we really want to go back to a world where the biggest threat to your life was starvation?
- gpawl 9y agoYou confuse "corporation" with "company"
- overcast 9y agoYou can be incorporated without going public. The ability to raise needed capital is a great thing, but it also comes with a lot of negative aspects as a result.
- taneq 9y agoSure, but on what timeframe? That's why small family businesses are some of the longest enduring - because their owners want them to generate earnings indefinitely. Investors who buy shares are often looking for much shorter term gains (1-5 years) and will put pressure on the board to sacrifice long term viability for a short term boost in share price.
- erikb 9y agoConsider a world where your company always dies after 1-5 years. But for each dying company there's a new one. Investors still make profit, people still get products, employees still get jobs. In that kind of scenario do you really need a long living company? I'd argue you don't. Long life is an arbitrary factor that in itself has not much value. And the longest living companies may actually be the biggest ones. At a certain size companies don't die anymore. They get merged with other big companies, restructured, or renamed.
- taneq 9y agoSome (all?) products need more than 1-5 years of active development to really become awesome. Every time a company dies, a huge amount of knowledge is lost.
- gozur88 9y agoIt's not that simple, though. The value of a company's stock is based on future earnings. If the company starts eating the proverbial seed corn you may get more profits disbursed, temporarily, but the value of the stock will go down to reflect the loss of future earnings. There's no free lunch, even for investors.