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I think the hope is that Red Hat would care about its own long term profitability. That is, the people running Red Hat will realize that they're sacrificing fu

I think the hope is that Red Hat would care about its own long term profitability. That is, the people running Red Hat will realize that they're sacrificing future revenue by prioritizing instant profits and this course is unsustainable. If they're interested in maximizing long term revenue, they should take the long term view. That is a reasonable idea. Unfortunately, the situation seems to be that the execs making these decisions are taking a pump and dump approach to the brand and don't care if Red Hat is still in business by the end of the decade. They'd rather the certainty of a dollar today than the promise of ten dollars tomorrow.

eikenberry 3y ago
> I think the hope is that Red Hat would care about its own long term profitability. They are a public corporation. They only care about the short term sheet as that is all investors care about. As long as the stock market punishes long term thinking this is what you will get. Part of me thinks it is by design... that it is easier to make money in the market if you have a steady flow of companies going public then eventually going out of business.
- mananaysiempre 3y ago
  > As long as the stock market punishes long term thinking this is what you will get. I hate to have to ask this, but why is this not priced in? In a naive conception of the stock market, public knowledge that a company is screwing itself over is basically free money, and somebody should take that money and thereby push the stock price down. Why, again and again in tech, does that not happen? Is the slow decline simply too slow or what?
  - BirAdam 3y ago
    There are a few parts to this. The first is, the future is currently extremely uncertain and therefore short term moves make sense. The second is the same as every other industry, if the price of money (interest rates) is super low people accumulate debt leveraging the future for the present and thereby raising the need for immediate return. This second part creates a feedback loop of constantly needing more and more revenue to pay the lenders. The third part of this is that most megacorps become seriously dysfunctional over time. There are a ton of reasons for this, but it mostly comes down to growing bureaucratization. IBM is among the worst in this regard, and many people predicted exactly this future when IBM bought Red Hat.
    - eikenberry 3y ago
      Personally I see it as an inherent flaw in the corporate model and we should rethink the idea of permanent corporations.

eikenberry 3y ago

> I think the hope is that Red Hat would care about its own long term profitability. They are a public corporation. They only care about the short term sheet as that is all investors care about. As long as the stock market punishes long term thinking this is what you will get. Part of me thinks it is by design... that it is easier to make money in the market if you have a steady flow of companies going public then eventually going out of business.

mananaysiempre 3y ago
> As long as the stock market punishes long term thinking this is what you will get. I hate to have to ask this, but why is this not priced in? In a naive conception of the stock market, public knowledge that a company is screwing itself over is basically free money, and somebody should take that money and thereby push the stock price down. Why, again and again in tech, does that not happen? Is the slow decline simply too slow or what?
- BirAdam 3y ago
  There are a few parts to this. The first is, the future is currently extremely uncertain and therefore short term moves make sense. The second is the same as every other industry, if the price of money (interest rates) is super low people accumulate debt leveraging the future for the present and thereby raising the need for immediate return. This second part creates a feedback loop of constantly needing more and more revenue to pay the lenders. The third part of this is that most megacorps become seriously dysfunctional over time. There are a ton of reasons for this, but it mostly comes down to growing bureaucratization. IBM is among the worst in this regard, and many people predicted exactly this future when IBM bought Red Hat.
  - eikenberry 3y ago
    Personally I see it as an inherent flaw in the corporate model and we should rethink the idea of permanent corporations.