3 ms·

The "AGI is right around the corner" argument is effectively corporate malpractice. No, shareholders don't want you to wait around and do nothing (other than a

The "AGI is right around the corner" argument is effectively corporate malpractice. No, shareholders don't want you to wait around and do nothing (other than a few layoffs here and there) while you wait for AGI.

roncesvalles 2y ago
The layoff mass hysteria that ran through the tech industry established doing less or nothing as a corporate virtue. If the market gave your company a PE ratio of 20+ and you're flush with cash, it is borderline fiduciary negligence to be slashing projects and doing layoffs. Your shareholders didn't invest in you for the capital preservation portfolio-management skills of your finance department.
- ptero 2y ago
  Not necessarily. Should the market action bump up a company PE very high (hello, Costco at PE 53 today) that's not a reason to splurge on projects. On the contrary, many shareholders would expect the company to behave responsibly, save cash, pause share buybacks and build up war chest for leaner times, where buying a competitor could be way cheaper. My 2c.
  - roncesvalles 2y ago
    If the PE ratio is high enough, the company can raise money by simply issuing more shares. Giving the company a money-printer is the whole point of the stock market. That's what makes you an investor -- you're offering the company the value of your shares by exposing yourself to "inflation" whenever the company needs to raise some money.
    - ptero 2y ago
      On paper. In reality, issuing shares (or debt) takes time and is a complex process, a mere sign of which can dampen share prices. > That's what makes you an investor -- you're offering the company the value of your shares by exposing yourself to "inflation" whenever the company needs to raise some money. I beg to differ. What makes me an investor is buying a share of future company profits, directly via dividends or indirectly via a future sale of shares. Many of the companies I invested in over the last 30 years were (over time) reducing share counts via buybacks, not issuing shares like candy.
      - roncesvalles 2y ago
        You're not an "investor" if you aren't actually funding the company. Trading scrips that entitle you to a share of the profit is not "funding" the company. Except that you are -- every time that the company prints shares, they've taken some value from you to fund their operations. If companies weren't allowed to issue shares from thin air, there wouldn't be much point to the stock market.
- gonzo41 2y ago
  Everything you've said sounds like next quarters problem.
tobr 2y ago
”We’ve become so efficient and are so forward-thinking, we just don’t need all these pesky employees” sounds better than ”We overhired and it turns out money isn’t free anymore”.

roncesvalles 2y ago

The layoff mass hysteria that ran through the tech industry established doing less or nothing as a corporate virtue. If the market gave your company a PE ratio of 20+ and you're flush with cash, it is borderline fiduciary negligence to be slashing projects and doing layoffs. Your shareholders didn't invest in you for the capital preservation portfolio-management skills of your finance department.

ptero 2y ago
Not necessarily. Should the market action bump up a company PE very high (hello, Costco at PE 53 today) that's not a reason to splurge on projects. On the contrary, many shareholders would expect the company to behave responsibly, save cash, pause share buybacks and build up war chest for leaner times, where buying a competitor could be way cheaper. My 2c.
- roncesvalles 2y ago
  If the PE ratio is high enough, the company can raise money by simply issuing more shares. Giving the company a money-printer is the whole point of the stock market. That's what makes you an investor -- you're offering the company the value of your shares by exposing yourself to "inflation" whenever the company needs to raise some money.
  - ptero 2y ago
    On paper. In reality, issuing shares (or debt) takes time and is a complex process, a mere sign of which can dampen share prices. > That's what makes you an investor -- you're offering the company the value of your shares by exposing yourself to "inflation" whenever the company needs to raise some money. I beg to differ. What makes me an investor is buying a share of future company profits, directly via dividends or indirectly via a future sale of shares. Many of the companies I invested in over the last 30 years were (over time) reducing share counts via buybacks, not issuing shares like candy.
    - roncesvalles 2y ago
      You're not an "investor" if you aren't actually funding the company. Trading scrips that entitle you to a share of the profit is not "funding" the company. Except that you are -- every time that the company prints shares, they've taken some value from you to fund their operations. If companies weren't allowed to issue shares from thin air, there wouldn't be much point to the stock market.
gonzo41 2y ago
Everything you've said sounds like next quarters problem.

tobr 2y ago

”We’ve become so efficient and are so forward-thinking, we just don’t need all these pesky employees” sounds better than ”We overhired and it turns out money isn’t free anymore”.