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But there is no reason why it is better or somehow more moral for a business to invest more and more in expanding its own operations vs. making that capital ava
by adrianratnapala 9y ago
But there is no reason why it is better or somehow more moral for a business to invest more and more in expanding its own operations vs. making that capital available for other kinds of investments.
- mcnamaratw 9y agoThere is a reason why it can be more moral. If managers are just running the share price up to inflate the value of their options, that costs the owners (shareholders) money. (The managers might keep exercising options, then spending the owners' money to buy back shares. Long term you end up with the same number of shares outstanding. Where did all the money for those buybacks go? To people who exercised stock options.) A genuine robber baron capitalist who intended to hang onto her own shares long term would generally just shitcan managers who behaved that way. But 401k investors don't have the option. I'm ignoring workers here. I'm only talking about morality between owners and managers.