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What are shareholders supposed to care about? They give a company capital in hopes of getting more back in the future. Are shareholders meant to be philanthropi
by bagacrap 3y ago
What are shareholders supposed to care about? They give a company capital in hopes of getting more back in the future. Are shareholders meant to be philanthropists?
- unethical_ban 3y agoThey aren't always meant to exist. Why must everything be about the extraction if capital?
- tasubotadas 3y agoIt gets created, not extracted
- asdgkasdngionio 3y agoIn the case of Reddit, it's definitely extracted. Reddit is just a particularly poorly-run and particularly large forum. Reddit (and Digg before it) did not create new forms of communication, merely placed them under the control of capital.
- JohnFen 3y agoIt gets created, then extracted.
- paulddraper 3y agoBecause that's what the owners of said capital want. Aka capitalists
- pixelatedindex 3y agoDo shareholders give capital? Maybe if you’re on the board or something? But even then it really feels like shares are the dissemination of capital, where if your company does well then the share goes up. Like me buying 5 shares of Apple isn’t really giving Apple any capital as the price is based on market cap. Happy to learn if I’m wrong though.
- lotsofpulp 3y agoMarket capitalization is a function of share price, specifically share price times number of shares. You buying 5 shares shifts the demand curve for the share to the right, resulting in an increase in the price. (absent a simultaneous proportional increase in the supply of shares). While it may not feel like your purchase of 5 shares gave Apple capital, your demand was surely part of the aggregate demand and supply that determines Apple’s share price at a certain point in time, and hence informs Apple’s market cap.
- HWR_14 3y agoNone of what you just described gives Apple capital unless Apple decides to issue more shares. Given that Apple has been retiring shares, not issuing them, your purchase of Apple stock and subsequent shift of the demand curve actually removes more capital from Apple than if you did not purchase any stock.
- relix 3y agoThis is a very naive, simplified, and wrong take on a generally well accepted concept. Point 1: increased demand for stocks will increase the price of it and thus the market cap. Point 2: the higher the market cap of a company the more capital it has available.
- HWR_14 3y agoI'm saying point 2 is only true if the company wants to issue shares (unless you are talking about second-order effects like cheaper bond rates). Apple is actively repurchasing shares, so they don't have more capital because the price went up. Yes, it theoretically means they could raise more money by issuing shares, but that's not happening.
- lotsofpulp 3y agoIs it more capital if they are using RSUs in compensation?
- dx034 3y agoNo but usually these things can align quite well. Build a user friendly website and usage will go up. It seemed like reddit worked more on getting usage down by restricting a lot of usage to their app. I don't think that's in the interest of shareholders.
- derelicta 3y agoShareholders are parasite in the first place. They can't be philanthropists. It's like saying "generous thieves". Doesn't make sense.
- bagacrap 3y agoSimple fix --- keep your company private. That does require you to actually be profitable though.
- deleted 3y ago[deleted]