5 ms·

Shareholders don't always act in a rational way, plenty of companies and trillions in shareholder value have been destroyed by stupid short sighted shareholder

• prepend 8y ago
  In the aggregate long term they do. Shareholders don’t act rationally, but the market eventually does.
  • AlexandrB 8y ago
    > Shareholders don’t act rationally, but the market eventually does. Citation needed. I hate to bring up 2008 again, but the market first acted irrationally by over-investing in garbage CDOs and then "corrected" in a way that would have tanked the economy without massive public intervention. If that's rational behavior than perhaps we should nominate the next person drunkenly weaving between two lanes for Driver of the Year.
    • prepend 8y ago
      “Eventually” being a key word as there are corrects. 2008 is one year out of many.
  • gowld 8y ago
    "Rational" does not mean "maximizing profit". Sometimes rational mean throwing a failed experiment in the trash, after a past irrational or poor decision.