5 ms·

No question but I love the idea. I was just explaining to my wife about how I never want to work at a publicly traded company because their only goal is maximi

• eries 5y ago
  Thank you!
• acchow 5y ago
  > their only goal is maximizing shareholder value in the short term. What about Amazon that operated on losses for many consecutive years?
  • CameronNemo 5y ago
    Profit is not directly linked to shareholder value. E.g. an expanding business that is operating at a loss could end up benefiting the shareholders (through valuation) if there is an expectation of future profitability.
    • repsilat 5y ago
      The grandparent quoted the line >> their only goal is maximizing shareholder value in the short term and mentioned Amazon making a loss. You're right that Amazon could credibly be described as "maximizing shareholder value", but I think the question of whether they maximize shareholder value in the short term is more subtle. You could do some jiujitsu and say "long-term value maximization is equivalent to short-term value maximization under reasonable assumptions", but I think the discussion upthread was about a more prosaic concept of short-termism that is related to profits. They wouldn't have qualified their statement with "in the short term" if they'd meant "expected NPV" :-).
      • CameronNemo 5y ago
        But here is the catch: for long term expected profits to affect short term value, the market has to be convinced of it. Actual long term performance requires more than PR, pitching, and posturing. It requires actually following through and reaching the expected profits.