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One aspect of a profit capped company is that as they start to make more and more revenue (and profit) they’ll be heavily incentivized to just invest it all bac
by peter422 4y ago
One aspect of a profit capped company is that as they start to make more and more revenue (and profit) they’ll be heavily incentivized to just invest it all back into employees or datacenters or 8 figure domain names since the for company can’t keep the extra profit anyways.
- mertd 4y agoIt says the profits are capped at 100x of any investment and it is also known that MSFT invested $10B. So looks like they have some headroom before needing such accounting?
- peter422 4y agoThe cap goes down as the company gets bigger and bigger, I doubt Microsoft is at the 100x number. But regardless of what exactly the cap is, it creates an incentive for the company to operate as close to 0 profit as possible because there is much less incentive for excess profit… they don’t get to keep it. But they do get to keep anything that is a reasonable business expense.
- Jensson 4y agoHow many companies ever has paid out a total of 1 trillion dollars? I don't think any current companies has.