4 ms·
So, what is the right answer? Even if it's not illegal, if investors are short term profit driven and can pop in and out of investments at will, does that reall
by pwillia7 4y ago
So, what is the right answer? Even if it's not illegal, if investors are short term profit driven and can pop in and out of investments at will, does that really matter?
The agents are put in place by the owners/board. As long as there's no reason to prioritize long term stability and growth duty over short term profits, what will change?
And the opposite -- owners NOT being in charge of agents -- sounds even scarier.
Do any markets lock-in investors for a period of time, with benefits to encourage that? Isn't this how 401ks and IRAs work, even if that's not their intent (maybe it is I don't know)
It seems like if you could create a % of owners that had longer investment horizons, there would be a faction that would push agents to care more about long term stability and growth of a company than wringing as much money out of it in the next 3-6 months as we can.
I think you can see this trend outside of markets as well -- You take a trusted, established thing, and gut it for short term profit while eroding the trust. PVH has been doing this for a long time with brands like Tommy Hilfiger, Calvin Klein, etc, where they have 'discount stores' that actually sell completely different product lines than the flagship stores and what their 'influencers' wear. The 'discount' line is of the lowest quality possible.[1]
I suspect LVMH will end up doing the same thing with the real luxe brands soon -- Look out for those $90 LV handbags...[2]
[1]: https://www.pvh.com/brands https://www.pvh.com/brands
[2]: https://www.lvmh.com/houses/ https://www.lvmh.com/houses/
- JumpCrisscross 4y agoThe answer is no, and it depends. Different shareholders have different preferences. Dynamic cap tables make this a difficult problem, but not an intractable one.