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On the plus side, you can just declare bankruptcy and fold instead of becoming a share cropper. Heres the thing, these assets deprecate, while the stock doesn'
by jonway 11mo ago
On the plus side, you can just declare bankruptcy and fold instead of becoming a share cropper.
Heres the thing, these assets deprecate, while the stock doesn't. I see a big asymmetry in deals like this, and I do not like it. When you start a business and become indispensable to your customers, you're doing well. If a company fails, it is maybe unavoidable. In situations like this, the risk increases because now these companies are interdependent not only as suppliers and providers, but in their intrinsic value and likely decision making insofar as shares can be voting shares. In any case, the C Suite and board sure know who owns %10 of the shares.
>In our world however companies are free to gamble on the side as long as their owners don't mind.
This constitutes an enormous systemic risk. We are treading in dangerous waters. The owners are not the only stakeholders in a company.
- scotty79 11mo ago>In our world however companies are free to gamble on the side as long as their owners don't mind. > This constitutes an enormous systemic risk. Tell me about it. 2008 crash was a result of exactly that. Banks instead of doing banking focused on gambling on risky assets and lost. Nvidia gamble is looking less obviously bad.