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There are a whole lot of companies that are run to benefit their management and not their shareholders. At best, they might be making no money but keeping a bun

There are a whole lot of companies that are run to benefit their management and not their shareholders. At best, they might be making no money but keeping a bunch of people in work. There's a good reason public shareholders historically demanded accountability - maybe it's fine for now, but all it takes is some management that you can't kick out, paying themselves extortionate salaries and driving the company into the ground at the same time to recognise the problems with "owning" a company you have no right to actually control (via replacing management and so on)

teitoklien 1y ago
SEC and most states like delaware where companies incorporate do have minority shareholder protections, regardless of these terms. A board of directors can screw shareholders even without one controlling director. The protections for minority shareholder are seperate. Also the news of malpractice by directors like you mention leads to SEC investigations and stocks come crashing down before they can sell it (as they must declare their stock sales a few days before doing it)
- Panzer04 1y ago
  Given cases like Elon moving to less protective jursidictions, those protections are not necessarily as protective as you might prefer, especially if you sign them away at some point in the past. It's going to be a lot harder to protect your rights, especially around the margins, if you agree to terms like the above.
zenonu 1y ago
The alternative is enshittification of the entire product lineup to include ads, exorbitant subscription prices, reduced functionality along a painful price gradient, morphing into a dopamine social product, or a goal to rent real-life assets for to an increasingly impoverished population. Pee in your piss bottle while delivering that Amazon package until we can figure out how to automate your job away too. The shareholders demand it!
msgodel 1y ago
It's actually a crime in the US not to manage a public company in the interest of the shareholders. (There was a large case which Ford lost establishing the way this is interpreted now which many people argue is why it gets interpreted in such a shortsighted way so often although personally I'm not sure.) It makes sense, you're disposing of the capital the shareholders own.
- freddie_mercury 1y ago
  No, it isn't a crime. Dodge v. Ford Motor Co. was a civil case, not a criminal case. And it was in the Michigan Supreme Court so has no standing in the other 49 states. And in practice the "business judgement rule" makes it very easy for businesses to do whatever they want as long as they have a vaguely plausible explanation for how it helps the business as a whole. ("We need to buy a private jet for our CEO because he is integral to our growth and success.")
mattmaroon 1y ago
There are certainly downsides to it, but you’ll notice that most of the biggest companies of the last 20 years had a dual class stock structure that gives the founders a high level of control. The most efficient government is a benevolent dictatorship, the problem, of course is that benevolent dictators don’t live forever and sooner or later you get a non-benevolent one. These sorts of dual class share structures avoid that issue by generally becoming common stock on transfer so it turns into a democracy with the end of the dictator. With an IPO you at least got to spend several years seeing how the dictator did.

teitoklien 1y ago

SEC and most states like delaware where companies incorporate do have minority shareholder protections, regardless of these terms. A board of directors can screw shareholders even without one controlling director. The protections for minority shareholder are seperate. Also the news of malpractice by directors like you mention leads to SEC investigations and stocks come crashing down before they can sell it (as they must declare their stock sales a few days before doing it)

Panzer04 1y ago
Given cases like Elon moving to less protective jursidictions, those protections are not necessarily as protective as you might prefer, especially if you sign them away at some point in the past. It's going to be a lot harder to protect your rights, especially around the margins, if you agree to terms like the above.

zenonu 1y ago

The alternative is enshittification of the entire product lineup to include ads, exorbitant subscription prices, reduced functionality along a painful price gradient, morphing into a dopamine social product, or a goal to rent real-life assets for to an increasingly impoverished population. Pee in your piss bottle while delivering that Amazon package until we can figure out how to automate your job away too. The shareholders demand it!

msgodel 1y ago

It's actually a crime in the US not to manage a public company in the interest of the shareholders. (There was a large case which Ford lost establishing the way this is interpreted now which many people argue is why it gets interpreted in such a shortsighted way so often although personally I'm not sure.) It makes sense, you're disposing of the capital the shareholders own.

freddie_mercury 1y ago
No, it isn't a crime. Dodge v. Ford Motor Co. was a civil case, not a criminal case. And it was in the Michigan Supreme Court so has no standing in the other 49 states. And in practice the "business judgement rule" makes it very easy for businesses to do whatever they want as long as they have a vaguely plausible explanation for how it helps the business as a whole. ("We need to buy a private jet for our CEO because he is integral to our growth and success.")

mattmaroon 1y ago

There are certainly downsides to it, but you’ll notice that most of the biggest companies of the last 20 years had a dual class stock structure that gives the founders a high level of control. The most efficient government is a benevolent dictatorship, the problem, of course is that benevolent dictators don’t live forever and sooner or later you get a non-benevolent one. These sorts of dual class share structures avoid that issue by generally becoming common stock on transfer so it turns into a democracy with the end of the dictator. With an IPO you at least got to spend several years seeing how the dictator did.