6 ms·

I feel this entire thread has quite missed the point of the question the way a neutrino passes through a solid object and interacts with nothing but empty space

I feel this entire thread has quite missed the point of the question the way a neutrino passes through a solid object and interacts with nothing but empty space. People have talked about microeconomics, gig economies, labour shifting, bad old days, safety, subsidies, licenses.... but we've gotten no closer to understanding; "Why Is a Company That Lost Billions Claimed to Be Successful?" To answer this one must ask "What is financialisation?" The short answer is; a system in which the success or failure of a company is of no relevance to its "value". Under financialised logic it is absolutely immaterial whether Twitter, Uber or whatever make a penny. Ever. Or whether any of the stakeholders are served. The rules of traditional business go out the window. All that matters is the stock price of a tradable financial entity (a company) based on brand confidence/perception. Under that system, Uber is successful so long as the financial market says it is. When it decides it's not successful, it's not. One has to realise that a total detachment of political economics and power has taken place.

gruez 5y ago
>Under financialised logic it is absolutely immaterial whether Twitter, Uber or whatever make a penny. Ever. Or whether any of the stakeholders are served. The rules of traditional business go out the window. What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? They're not turning a profit now, but it seems at least somewhat plausible that they'll make money in the future. Under that assumption (ie. future expected earnings), it seems perfectly consistent with "rules of traditional business". >Under that system, Uber is successful so long as the financial market says it is. When it decides it's not successful, it's not. One has to realise that a total detachment of political economics and power has taken place. Congratulations. You just discovered "the price of something is what someone is willing to pay for it", not its actual utility.
- upvotepartytime 5y ago
  I think stakeholders, not shareholders, was intentional. Stakeholders (users, advertisers, whatever) might not be well served by a lack of edit button or whatever, but that’s only very tenuously connected to company value. Shareholders care that they make their pennies of course. That seems to be (part of) the observation. (Which as you say isn’t earth shattering but still worth remembering when you start wondering “why the heck is this company worth so much?” Because people think so. That’s all.)
  - gruez 5y ago
    >Shareholders care that they make their pennies of course. That seems to be (part of) the observation. I don't get it. The point of a company is to make money for its shareholders. This has been the case forever now, and certainly isn't caused by "financialised logic". I'd be interested to hear what the "rules of traditional business" (which presumably says that the point of a company isn't to make money for its shareholders?) that OP talked about is.
    - nonrandomstring 5y ago
      > The point of a company is to make money for its shareholders It is from this premise that your other (mis)understandings arise. Returning to the OP question now, what do we mean by "successful"?
    - nonrandomstring 5y ago
      Here you go; https://www.youtube.com/watch?v=nGbJYk-x1sc https://www.youtube.com/watch?v=nGbJYk-x1sc It took me a while to seek to my mental pointer to this. Wendy Brown is brilliant. But some caveats to try to encourage people to stay with it; The video is long. It's dry and academic. She's a classic leftie. The "business" under discussion is education. But hidden within this is one of the most cogent explanations of financialised decorrelation of social and monetary values. (Brown's other writing on political science is also brilliant and worth the effort regardless of your actual personal political position.)
- nonrandomstring 5y ago
  > What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? Who are "they"? Be specific. The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners. > what someone is willing to pay for it", not its actual utility Pay for what? Please be specific. The service of the company or the value of its share? You've really answered your own question. The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else. Just don't be the shareholder left holding anything when the music stops.
  - gruez 5y ago
    >Who are "they"? Be specific. The company. >The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners. What are you arguing for here? In the first comment the problem seems to be that the company isn't profitable, but in this comment you the problem seems to be the fact that shareholders are making money but the "workers, or customers, or execs, or owners" aren't. Can you lay out your specific claims? >Pay for what? Please be specific. The service of the company or the value of its share? The principle applies to all goods/services, but in this case I was talking about the shares in the compayn. >The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else. And what do you think that share prices are driven by? Do you think a few men in a smoke filled room arbitrarily set the price, making it go up and up?
    - lcw 5y ago
      The way you phrased your opposition made it sound like you think that shareholders care if a company has positive net income. However, the whole point of this discussion is that shareholders have no vested interest in the financials of the company in cases like Uber. There is really no correlation in these companies being more profitable and shareholder wealth. Generally the only money that goes to shareholders from a companies financial performance is dividends anyways, which obviously Uber would never do yet it made people rich.
- tharne 5y ago
  > Congratulations. You just discovered "the price of something is what someone is willing to pay for it", not its actual utility. There's a some truth to this comment, but only some. Your comment also accurately describes a ponzi scheme.
- deleted 5y ago
  [deleted]
- rsanek 5y ago
  > They're not turning a profit now Uber turned a profit in 2021Q2. [0] Twitter now has had many profitable quarters. [1] Of course, cumulatively, they are both money-losing, but I think the perception of these businesses as only having a 'plausibility' of making money is perhaps dated. [0] https://www.macrotrends.net/stocks/charts/UBER/uber-technologies/net-income https://www.macrotrends.net/stocks/charts/UBER/uber-technolo... [1] https://www.macrotrends.net/stocks/charts/TWTR/twitter/net-income https://www.macrotrends.net/stocks/charts/TWTR/twitter/net-i...
  - scarface74 5y ago
    Your citation says they lost money.
    - rsanek 5y ago
      You may be looking at "trailing 12 months" -- take a look at the quarterly charts, which do indeed report profits.
      - dmitriid 5y ago
        They lost over 20 billion dollars and made a meagre profit in one quarter of one year thanks to Uber Eats during the pandemic. Ah, healthy business.
        Ekaros 5y ago
        So made money on also questionable business on both supply, delivery side. And with actual cost realisation probably also on customer side. Doesn't look too healthy.
  - femto113 5y ago
    "Turning a profit" has almost no meaning, particularly with mark-to-market investments in the mix. More concretely Uber's business has never generated positive cash flow (i.e. taken in more money in a given period than they spent in that same period) and are projecting they will reach that milestone for the first time in Q4 of this year.
- gwbas1c 5y ago
  > What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? Well, do they believe they'll be able to sell their stock for more than they paid it? Were they caught up in the excitement and bought the stock against better judgement?
jimbokun 5y ago
So Uber is a Dutch tulip.
tharne 5y ago
This is a brilliant explanation of financialisation.
LudwigNagasena 5y ago
That’s called speculation.
- tgv 5y ago
  It’s more like a pyramid scheme: investors require more investors to get a good ROI when profit is irrelevant. Edit: not=>more
FabHK 5y ago
> To answer this one must ask "What is financialisation?" The short answer is; a system in which the success or failure of a company is of no relevance to its "value". Nonsense. Granted, with meme stocks, the price of a stock has been decoupled from any underlying notion of value, which is disconcerting (but driven by retail investors/gamblers, not by traditional investors). But with Uber and many others, it seems reasonable to assume that the investors expect to recoup their money by (ultimately) earning dividends from Uber's successful operation, which is good old traditional finance. There are two problems left: 1. It is conceivable that some early investors see that no sustainable profits might be possible, but still fund and develop the venture in order to sell it (at a higher valuation) to less sophisticated investors later (that don't see the limitations of the business model so clearly). 2. It is plausible that the entire business model is predicated on the idea of a predatory monopoly, ie driving out competition first and raising prices second. Those are massive problems that need to be addressed with aggressive regulation, but they are not a consequence of "financialisation". > Under that system, Uber is successful so long as the financial market says it is. "The financial market" cannot just arbitrarily "say" what a company is worth (and definitely not in the long run) - there are just too many players.

gruez 5y ago

>Under financialised logic it is absolutely immaterial whether Twitter, Uber or whatever make a penny. Ever. Or whether any of the stakeholders are served. The rules of traditional business go out the window. What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? They're not turning a profit now, but it seems at least somewhat plausible that they'll make money in the future. Under that assumption (ie. future expected earnings), it seems perfectly consistent with "rules of traditional business". >Under that system, Uber is successful so long as the financial market says it is. When it decides it's not successful, it's not. One has to realise that a total detachment of political economics and power has taken place. Congratulations. You just discovered "the price of something is what someone is willing to pay for it", not its actual utility.

upvotepartytime 5y ago
I think stakeholders, not shareholders, was intentional. Stakeholders (users, advertisers, whatever) might not be well served by a lack of edit button or whatever, but that’s only very tenuously connected to company value. Shareholders care that they make their pennies of course. That seems to be (part of) the observation. (Which as you say isn’t earth shattering but still worth remembering when you start wondering “why the heck is this company worth so much?” Because people think so. That’s all.)
- gruez 5y ago
  >Shareholders care that they make their pennies of course. That seems to be (part of) the observation. I don't get it. The point of a company is to make money for its shareholders. This has been the case forever now, and certainly isn't caused by "financialised logic". I'd be interested to hear what the "rules of traditional business" (which presumably says that the point of a company isn't to make money for its shareholders?) that OP talked about is.
  - nonrandomstring 5y ago
    > The point of a company is to make money for its shareholders It is from this premise that your other (mis)understandings arise. Returning to the OP question now, what do we mean by "successful"?
  - nonrandomstring 5y ago
    Here you go; https://www.youtube.com/watch?v=nGbJYk-x1sc https://www.youtube.com/watch?v=nGbJYk-x1sc It took me a while to seek to my mental pointer to this. Wendy Brown is brilliant. But some caveats to try to encourage people to stay with it; The video is long. It's dry and academic. She's a classic leftie. The "business" under discussion is education. But hidden within this is one of the most cogent explanations of financialised decorrelation of social and monetary values. (Brown's other writing on political science is also brilliant and worth the effort regardless of your actual personal political position.)
nonrandomstring 5y ago
> What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? Who are "they"? Be specific. The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners. > what someone is willing to pay for it", not its actual utility Pay for what? Please be specific. The service of the company or the value of its share? You've really answered your own question. The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else. Just don't be the shareholder left holding anything when the music stops.
- gruez 5y ago
  >Who are "they"? Be specific. The company. >The shareholders can make a pretty penny while the companies never do. Because they're shareholders, not workers, or customers, or execs, or owners. What are you arguing for here? In the first comment the problem seems to be that the company isn't profitable, but in this comment you the problem seems to be the fact that shareholders are making money but the "workers, or customers, or execs, or owners" aren't. Can you lay out your specific claims? >Pay for what? Please be specific. The service of the company or the value of its share? The principle applies to all goods/services, but in this case I was talking about the shares in the compayn. >The "actual utility" of a share is nothing but it's propensity to go up. Financial markets don't care about anything else. And what do you think that share prices are driven by? Do you think a few men in a smoke filled room arbitrarily set the price, making it go up and up?
  - lcw 5y ago
    The way you phrased your opposition made it sound like you think that shareholders care if a company has positive net income. However, the whole point of this discussion is that shareholders have no vested interest in the financials of the company in cases like Uber. There is really no correlation in these companies being more profitable and shareholder wealth. Generally the only money that goes to shareholders from a companies financial performance is dividends anyways, which obviously Uber would never do yet it made people rich.
tharne 5y ago
> Congratulations. You just discovered "the price of something is what someone is willing to pay for it", not its actual utility. There's a some truth to this comment, but only some. Your comment also accurately describes a ponzi scheme.
deleted 5y ago
[deleted]
rsanek 5y ago
> They're not turning a profit now Uber turned a profit in 2021Q2. [0] Twitter now has had many profitable quarters. [1] Of course, cumulatively, they are both money-losing, but I think the perception of these businesses as only having a 'plausibility' of making money is perhaps dated. [0] https://www.macrotrends.net/stocks/charts/UBER/uber-technologies/net-income https://www.macrotrends.net/stocks/charts/UBER/uber-technolo... [1] https://www.macrotrends.net/stocks/charts/TWTR/twitter/net-income https://www.macrotrends.net/stocks/charts/TWTR/twitter/net-i...
- scarface74 5y ago
  Your citation says they lost money.
  - rsanek 5y ago
    You may be looking at "trailing 12 months" -- take a look at the quarterly charts, which do indeed report profits.
    - dmitriid 5y ago
      They lost over 20 billion dollars and made a meagre profit in one quarter of one year thanks to Uber Eats during the pandemic. Ah, healthy business.
      - Ekaros 5y ago
        So made money on also questionable business on both supply, delivery side. And with actual cost realisation probably also on customer side. Doesn't look too healthy.
- femto113 5y ago
  "Turning a profit" has almost no meaning, particularly with mark-to-market investments in the mix. More concretely Uber's business has never generated positive cash flow (i.e. taken in more money in a given period than they spent in that same period) and are projecting they will reach that milestone for the first time in Q4 of this year.
gwbas1c 5y ago
> What makes you think that shareholders in Twitter or Uber don't care that they'll never make a penny? Well, do they believe they'll be able to sell their stock for more than they paid it? Were they caught up in the excitement and bought the stock against better judgement?

jimbokun 5y ago

So Uber is a Dutch tulip.

tharne 5y ago

This is a brilliant explanation of financialisation.

LudwigNagasena 5y ago

That’s called speculation.

tgv 5y ago
It’s more like a pyramid scheme: investors require more investors to get a good ROI when profit is irrelevant. Edit: not=>more

FabHK 5y ago

> To answer this one must ask "What is financialisation?" The short answer is; a system in which the success or failure of a company is of no relevance to its "value". Nonsense. Granted, with meme stocks, the price of a stock has been decoupled from any underlying notion of value, which is disconcerting (but driven by retail investors/gamblers, not by traditional investors). But with Uber and many others, it seems reasonable to assume that the investors expect to recoup their money by (ultimately) earning dividends from Uber's successful operation, which is good old traditional finance. There are two problems left: 1. It is conceivable that some early investors see that no sustainable profits might be possible, but still fund and develop the venture in order to sell it (at a higher valuation) to less sophisticated investors later (that don't see the limitations of the business model so clearly). 2. It is plausible that the entire business model is predicated on the idea of a predatory monopoly, ie driving out competition first and raising prices second. Those are massive problems that need to be addressed with aggressive regulation, but they are not a consequence of "financialisation". > Under that system, Uber is successful so long as the financial market says it is. "The financial market" cannot just arbitrarily "say" what a company is worth (and definitely not in the long run) - there are just too many players.