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So it’s unjust? Have you ever seen a civil lawsuit?

nickff 7y ago
I'm not taking a position on whether it's 'just', I am simply pointing out that it primarily benefits the lawyers, and may benefit a few former shareholders. I believe that class-action suits are supposed to benefit the class, both in the judgement/settlement and in changing long-term incentives. Shareholder lawsuits appear to do neither.
- projektfu 7y ago
  Fair enough but screwing speculators in favor of die hard fans is not enough reason to hold off.
  - nickff 7y ago
    If this were a class-action lawsuit by people who were shorting Tesla stock, or owned some option on it, I would agree that it would be serve the purposes of class-action lawsuits (aside from lawyer-enrichment). But it isn't.
    - projektfu 7y ago
      Unfortunately for your position, it’s considered to harm all investors when a key executive mouths off like this.
      - nickff 7y ago
        I definitely agree that key executives mouthing off does harm the shareholders; the problem is that these shareholder class-actions against companies do not provide a real remedy to the harmed shareholders. I also agree that courts are allowing these lawsuits to proceed despite hearing objections like mine.
thaumasiotes 7y ago
It's not that it's unjust; a shareholder lawsuit is conceptually incoherent. The idea is that, in your capacity as owner of the company, you sue the company for screwing you over, and it pays a fine to you. But that makes you worse off, because it makes the company worse off, and you own the company. In the best case scenario, where the suit is costless and 100% of the fine goes to shareholders, the shareholders come out of the suit no worse off -- and no better off -- than they were before they sued. In any other scenario, they come out worse off. Imagine that I accidentally hammer my thumb and sue my hammer for the injury. I find it guilty and have it destroyed. How did my situation improve? All that happened is that I'm down a hammer.
- boznz 7y ago
  Buy $100 in shares, and also short it by $100M and I am sure you will come out of this just fine I'm guessing
- gamblor956 7y ago
  Shareholder lawsuits make sense, because the shareholder is seeking redress from a specific harm to them caused by the company. The long-term effect this may have on the company is irrelevant to the suit, especially for publicly-traded companies where individual shareholder ownership is so small as to be immaterial at a per-shareholder level. Imagine that I accidentally hammer my thumb and sue my hammer for the injury. I find it guilty and have it destroyed. How did my situation improve? All that happened is that I'm down a hammer. Your hammer is literally just an extension of you so you are just suing yourself. A company is not just an extension of its shareholders. In fact, the whole point of the corporate form is that the business is separate from its shareholders legally, financially, and for all purposes (except for some reason First Amendment rights).
  - catalogia 7y ago
    It's shameful that you've been downvoted across this thread for talking sense.
    - 7y ago

I'm not taking a position on whether it's 'just', I am simply pointing out that it primarily benefits the lawyers, and may benefit a few former shareholders. I believe that class-action suits are supposed to benefit the class, both in the judgement/settlement and in changing long-term incentives. Shareholder lawsuits appear to do neither.

projektfu 7y ago
Fair enough but screwing speculators in favor of die hard fans is not enough reason to hold off.
- nickff 7y ago
  If this were a class-action lawsuit by people who were shorting Tesla stock, or owned some option on it, I would agree that it would be serve the purposes of class-action lawsuits (aside from lawyer-enrichment). But it isn't.
  - projektfu 7y ago
    Unfortunately for your position, it’s considered to harm all investors when a key executive mouths off like this.
    - nickff 7y ago
      I definitely agree that key executives mouthing off does harm the shareholders; the problem is that these shareholder class-actions against companies do not provide a real remedy to the harmed shareholders. I also agree that courts are allowing these lawsuits to proceed despite hearing objections like mine.

thaumasiotes 7y ago

It's not that it's unjust; a shareholder lawsuit is conceptually incoherent. The idea is that, in your capacity as owner of the company, you sue the company for screwing you over, and it pays a fine to you. But that makes you worse off, because it makes the company worse off, and you own the company. In the best case scenario, where the suit is costless and 100% of the fine goes to shareholders, the shareholders come out of the suit no worse off -- and no better off -- than they were before they sued. In any other scenario, they come out worse off. Imagine that I accidentally hammer my thumb and sue my hammer for the injury. I find it guilty and have it destroyed. How did my situation improve? All that happened is that I'm down a hammer.

boznz 7y ago
Buy $100 in shares, and also short it by $100M and I am sure you will come out of this just fine I'm guessing
gamblor956 7y ago
Shareholder lawsuits make sense, because the shareholder is seeking redress from a specific harm to them caused by the company. The long-term effect this may have on the company is irrelevant to the suit, especially for publicly-traded companies where individual shareholder ownership is so small as to be immaterial at a per-shareholder level. Imagine that I accidentally hammer my thumb and sue my hammer for the injury. I find it guilty and have it destroyed. How did my situation improve? All that happened is that I'm down a hammer. Your hammer is literally just an extension of you so you are just suing yourself. A company is not just an extension of its shareholders. In fact, the whole point of the corporate form is that the business is separate from its shareholders legally, financially, and for all purposes (except for some reason First Amendment rights).
- catalogia 7y ago
  It's shameful that you've been downvoted across this thread for talking sense.
  - 7y ago