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Isn’t that because how we legally define success via public trading returns? It seems like privately owned businesses can avoid that ‘line must go up’ stupidity
by whythre 2y ago
Isn’t that because how we legally define success via public trading returns? It seems like privately owned businesses can avoid that ‘line must go up’ stupidity.
- Ekaros 2y agoYou could be public company that does not max returns... But any new company going public has almost certainly abandoned any morals or qualms to get that point.
- nottorp 2y agoIs there a legal definition? I thought it was a free market and companies will do whatever they deem necessary to "bring value to their shareholders". For example, they used to pay dividends instead of growing indefinitely. Remember that?
- whythre 2y agoYou are right, ‘legal definition’ isn’t right, but the legal doctrine derives from the Michigan Supreme Court’s ruling in Dodge vs Ford Motor co. “Dodge v. Ford Motor Co., 204 Mich 459; 170 NW 668 (1919), is a case in which the Michigan Supreme Court held that Henry Ford had to operate the Ford Motor Company in the interests of its shareholders, rather than in a manner for the benefit of his employees or customers.” This has been often sited as the beginning of ‘shareholder primacy,’ which has become parodied into the particularly stupid (if often accurate) meme of ‘line must go up.’
- lawlessone 2y agoWorks pretty well for Valve.
- deleted 2y ago[deleted]
- s1artibartfast 2y agoThis isn't a mandatory feature of public markets. There are entire classes of public stocks that don't depend on perpetual growth. The most notable are dividend yielding investments. There are even stocks where the strategy is "line goes down".