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Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you. The bankers thirst for profit must be slaked. If this means burni

Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you. The bankers thirst for profit must be slaked. If this means burning giant piles of (other people's) money to maybe have a 2% better rate of return next year then you do it.

umvi 4y ago
> Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you Note this is only for publicly traded companies. If you don't want your company to be like this, don't go public and you won't have to answer to shareholders and have to produce eternal growth.
- aeyes 4y ago
  This would require that the company is owned by itself or its founders. Startup companies like Snapchat have raised capital from external sources and need to pay it back which is a bit hard with no meaningful profit. The founders probably don't even have a say in this, these companies usually have a board of investors which will force the IPO or sale of the company.
  - infamouscow 4y ago
    Choosing to give up control of your startup to investors is also a business decision.
asdajksah2123 4y ago
This is backwards. Companies that cannot survive without massive infusions of cash go to Wall Street asking for money while promising growth. So if there's anyone to blame, it's companies who are unable to sustain businesses without raising massive sums of other people's cash.
songeater 4y ago
Look there is a reason Wall Street focuses on growth: the thing (company, organism, population, whatever) that does not grow will (eventually) be overtaken by that which does, no matter how small the latter's growth rate is. So when the "market" is composed of 1000s of companies, one of the easiest ways to differentiate the good from the bad is to filter by PROFITABLE growth. Now here is the rub... "PROFITABLE" often becomes hard to define so we have long periods of time where just "growth" is used as a proxy... and at the ends of bubbles you typically have lots of companies with unsustainable growth trends being valued at assinine multiples. But again... there is a (good?) reason the heuristic exists.

umvi 4y ago

> Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you Note this is only for publicly traded companies. If you don't want your company to be like this, don't go public and you won't have to answer to shareholders and have to produce eternal growth.

aeyes 4y ago
This would require that the company is owned by itself or its founders. Startup companies like Snapchat have raised capital from external sources and need to pay it back which is a bit hard with no meaningful profit. The founders probably don't even have a say in this, these companies usually have a board of investors which will force the IPO or sale of the company.
- infamouscow 4y ago
  Choosing to give up control of your startup to investors is also a business decision.

asdajksah2123 4y ago

This is backwards. Companies that cannot survive without massive infusions of cash go to Wall Street asking for money while promising growth. So if there's anyone to blame, it's companies who are unable to sustain businesses without raising massive sums of other people's cash.

songeater 4y ago

Look there is a reason Wall Street focuses on growth: the thing (company, organism, population, whatever) that does not grow will (eventually) be overtaken by that which does, no matter how small the latter's growth rate is. So when the "market" is composed of 1000s of companies, one of the easiest ways to differentiate the good from the bad is to filter by PROFITABLE growth. Now here is the rub... "PROFITABLE" often becomes hard to define so we have long periods of time where just "growth" is used as a proxy... and at the ends of bubbles you typically have lots of companies with unsustainable growth trends being valued at assinine multiples. But again... there is a (good?) reason the heuristic exists.