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Because investors will be able to own a piece of that company for less. The company hasn't changed, its ability to offer dividends hasn't changed, its longer t

by shkkmo 7y ago

Because investors will be able to own a piece of that company for less. The company hasn't changed, its ability to offer dividends hasn't changed, its longer term prospects haven't changed (due to divestment.) Really, the only impact this might have is a slight reduction in the ability to those companies to raise capital by selling stock (and I don't think that is incredibly common in the oil industry).

munk-a 7y ago
If the lack of investment from certain segments of the population was sustained then the stock will be of lower demand in the long term hurting it's price for investment, if this is really well sustained and consistently done then IPOs for such industries will raise less capital because there is less demand available when initial investors want to cash out. However, that's really conditional, I think in actuality we're observing a short term fluctuation and eventually investment will resume - in that case you're essentially handing your money to the people you disagree with by taking a loss (or less or a gain) when selling your stock, allowing them to purchase it under value, and then letting them resell the stock once the market has recovered from it's temporary depression. So divestment would work in theory with good coordination, but I don't think it'll work in practice because humans are terrible.
- shkkmo 7y ago
  > if this is really well sustained and consistently done then IPOs for such industries will raise less capital because there is less demand available when initial investors want to cash out. Would this really have an impact on fossil fuel usage? The companies that drive fossil fuel consumption are established players and it seems like limiting seed funding in their industry would only help these players. I'm pretty sure that you would have a bigger impact teleconferencing rather than flying around for meetings and investing the money saved on airfare in oil companies. The solution is not divestment, but investment. Taking your money out of oil companies seems far less effective that putting your money into green companies.
  - munk-a 7y ago
    Oh, I agree that other routes are more efficient, but divestment with dedication and co-operation could have an impact. Also, the amount of coaching and conditions in the post above were an effort to express how utterly futile it is for you to actually effect change through this approach - there are far more effective things to do as an individual or group... And if you've got enough clout to lobby then the best tactic is probably getting the US government to stop subsidizing oil because, honestly, what... why is that something that deserves subsidies.
- imtringued 7y ago
  At some point the price drops low enough for the company to just go private and continue with the same level of CO2 emissions. Unless the income flow from fossil fuel products stops the company will never be forced to shut down.

by shkkmo 7y ago

munk-a 7y ago

If the lack of investment from certain segments of the population was sustained then the stock will be of lower demand in the long term hurting it's price for investment, if this is really well sustained and consistently done then IPOs for such industries will raise less capital because there is less demand available when initial investors want to cash out. However, that's really conditional, I think in actuality we're observing a short term fluctuation and eventually investment will resume - in that case you're essentially handing your money to the people you disagree with by taking a loss (or less or a gain) when selling your stock, allowing them to purchase it under value, and then letting them resell the stock once the market has recovered from it's temporary depression. So divestment would work in theory with good coordination, but I don't think it'll work in practice because humans are terrible.

shkkmo 7y ago
> if this is really well sustained and consistently done then IPOs for such industries will raise less capital because there is less demand available when initial investors want to cash out. Would this really have an impact on fossil fuel usage? The companies that drive fossil fuel consumption are established players and it seems like limiting seed funding in their industry would only help these players. I'm pretty sure that you would have a bigger impact teleconferencing rather than flying around for meetings and investing the money saved on airfare in oil companies. The solution is not divestment, but investment. Taking your money out of oil companies seems far less effective that putting your money into green companies.
- munk-a 7y ago
  Oh, I agree that other routes are more efficient, but divestment with dedication and co-operation could have an impact. Also, the amount of coaching and conditions in the post above were an effort to express how utterly futile it is for you to actually effect change through this approach - there are far more effective things to do as an individual or group... And if you've got enough clout to lobby then the best tactic is probably getting the US government to stop subsidizing oil because, honestly, what... why is that something that deserves subsidies.
imtringued 7y ago
At some point the price drops low enough for the company to just go private and continue with the same level of CO2 emissions. Unless the income flow from fossil fuel products stops the company will never be forced to shut down.