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Spotify is a public for-profit company with shareholders, the purpose of their organization is not to make profit so they can redistribute it, but to increase t
by capableweb 3y ago
Spotify is a public for-profit company with shareholders, the purpose of their organization is not to make profit so they can redistribute it, but to increase the share value as much as possible in order for the shareholders to benefit. Sometimes that means that they need to increase profits, but not always, there are other ways to increase the share value besides profits.
- lotsofpulp 3y agoSuch as?
- azemetre 3y agoReducing operation costs (labor), selling valuable assets are two that immediately come to mind.
- lotsofpulp 3y agoBoth of those result in increasing profits.
- azemetre 3y agoMy bad, I misread what the person you were replying to asked.
- capableweb 3y ago"Hype" is a common way for "modern" companies to drive up share price, see TSLA for a good example of that. Greenwashing is another, not as common approach.
- lotsofpulp 3y agoLook at Tesla’s net income: https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-income https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc... That is not hype, that is cash.
- capableweb 3y agoRight, so you're saying that Tesla is a company that would never do anything to increase the share price, besides trying to increase profits?
- lotsofpulp 3y agoCompanies can do whatever they want, it does not mean it will work. No company’s share price is going to up for years and years because of “hype”. And the hype is for future profits anyway. The point is Tesla earns a lot of money, and has a good, proven trajectory.
- unicornmama 3y agoNet income is not cash.
- lotsofpulp 3y agoClose enough for the purposes of this conversation. Point is, they earn more money than they spend, the gap between those is growing. And they did it in a high barrier to entry business.