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I think that more important than ownership is the purpose of the company. Most companies have the purpose of making money. Few have a purpose which includes con
by metabagel 2y ago
I think that more important than ownership is the purpose of the company. Most companies have the purpose of making money. Few have a purpose which includes contributing to quality of life, unless that’s something which can be sold for a profit.
- devman0 2y agoNot just making money, but making more money than they did last year, forever. Like a company can't just be cool with the fact that they serve a profitable market niche and gainfully employ people. Investors need capital gains and won't just be satisfied with getting reliable dividends! Stock buy backs ruined corporate governance...
- positr0n 2y agoWhat different effects do stock buybacks have on corporate governance compared to dividends? My understanding is both return $X/share of capital to shareholders, buybacks are just more tax efficient, flexible, and a little more difficult to see the direct effect of.
- devman0 2y agoDividends get taxed immediately, so there is more pressure to reinvest profits in the company to find organic growth which is captured as capital gains instead. That reinvestment can take a lot of different forms like R&D, training, hiring, etc.
- positr0n 2y agoMakes sense, but weren't you just saying that the desire for constant growth/capital gains is a bad thing?