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Agreed. But I don't really believe that accelerating their demise is a large benefit to anyone aside the capital "investor" getting more money. The company has

Agreed. But I don't really believe that accelerating their demise is a large benefit to anyone aside the capital "investor" getting more money. The company has to do a reorientation, but that could be cut short by the stock market. Don't kid yourself that you are providing anything substantially important to further development.

nradov 5y ago
The stock market can't cut a company short. Even if the stock price goes to $0, the company still exists with all of it's assets, contracts, and employees. The stock price only matters if they do a secondary offering, and to a lesser extent for equity based employee compensation.
- whatshisface 5y ago
  There is this thing called a "hostile takeover," where you buy voting shares and then liquidate the company, which becomes very easy when the share price is $0.
- NovemberWhiskey 5y ago
  I mean look at Citigroup. C was $564.10 at the end of 2006. By early 2009 it was $10.20 - that's about a 98.2% reduction in the stock price. That's a much larger destruction of capital than GME ever was.
  - WJW 5y ago
    Do you imply that it was excessive short selling between 2006 and 2009 that lowered the price of Citigroup? It seems much more likely that the 2008 financial crisis had a lot to do with it and that Citigroup (which famously only escaped bankruptcy due to a government bailout) indeed lost 98.2% of its equity value. So it wasn't the stock price falling that brought the company low, it was the company failing that brought the stock price low.
    - NovemberWhiskey 5y ago
      No; not suggesting this has to with excessive short selling. I’m just supplying a data point to support the point that a large decrease in stock price needn’t have a material affect on the ability of a firm to operate.
  - raxxorrax 5y ago
    Didn't they make a 1 for 10 split in between? Still a reduction of course.

nradov 5y ago

The stock market can't cut a company short. Even if the stock price goes to $0, the company still exists with all of it's assets, contracts, and employees. The stock price only matters if they do a secondary offering, and to a lesser extent for equity based employee compensation.

whatshisface 5y ago
There is this thing called a "hostile takeover," where you buy voting shares and then liquidate the company, which becomes very easy when the share price is $0.
NovemberWhiskey 5y ago
I mean look at Citigroup. C was $564.10 at the end of 2006. By early 2009 it was $10.20 - that's about a 98.2% reduction in the stock price. That's a much larger destruction of capital than GME ever was.
- WJW 5y ago
  Do you imply that it was excessive short selling between 2006 and 2009 that lowered the price of Citigroup? It seems much more likely that the 2008 financial crisis had a lot to do with it and that Citigroup (which famously only escaped bankruptcy due to a government bailout) indeed lost 98.2% of its equity value. So it wasn't the stock price falling that brought the company low, it was the company failing that brought the stock price low.
  - NovemberWhiskey 5y ago
    No; not suggesting this has to with excessive short selling. I’m just supplying a data point to support the point that a large decrease in stock price needn’t have a material affect on the ability of a firm to operate.
- raxxorrax 5y ago
  Didn't they make a 1 for 10 split in between? Still a reduction of course.