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> Note how this is different than buying a company’s stock. People buy and sell stocks on a stock exchange, but the companies independently have money coming in
by aazaa 5y ago
> Note how this is different than buying a company’s stock. People buy and sell stocks on a stock exchange, but the companies independently have money coming in (from their clients). The stock of a profitable company is a positive-sum ecosystem. If somehow no one wants to buy the stock, a profitable company will be happy to buy it back itself.
It's almost as if the author has no sense of irony:
1. A crash in most company's stock would lead to utter disaster as interest rates, future fundraising, and executive compensation are all closely tied to the share price.
2. Stock buyback have been enabled by lax policies and a Fed only too happy to bend over backward with QE.
3. Many companies have little to no "money coming in" on a net basis.
Tether is a time bomb, there's no other way to put it. But if you're going to raise the alarm there, you might as well be fair about it.
- driverdan 5y agoYour point about the traditional financial markets is reasonable but it's not what the author is discussing and they have no obligation to do so.
- lottin 5y agoIf a company is profitable it means it generates net revenues. The owners of the company have a claim on these revenues. This means if you own the stock of a profitable company you have a claim on all this income. The stock price is the price at which you can sell this claim in the market. The thing is you don't have to sell the stock at a higher price in order to profit from it. That's what makes it different.