4 ms·

I'm in love with the idea of a profitless company for the reason that this company passes on all the value to employees and contractors providing the services i

by bobx11 13y ago

I'm in love with the idea of a profitless company for the reason that this company passes on all the value to employees and contractors providing the services instead of extracting that value their employees create for the benefit of shareholders.

gfodor 13y ago
What you say here doesn't make any sense. Shareholder value is increased by effective use of capital by the company. Plowing your margin back into your business if it can result in growth is good for shareholders, since the stock will rise, whereas plowing that profit into ill-advised acquisitions and executive bonuses is probably less so. At the same time, issuing a direct dividend to shareholders when there is little use for that capital for future growth is (obviously) good for shareholders, but issuing the same dividend when that money could have been used to increase the market cap of the business through growth is bad. In other words, the specific mechanism of how a company uses profit (or more specifically, free cash flow) does not have any inherent value to shareholders (dividends, buybacks, paying down debt, or re-investment.) It's only in the context of the opportunity cost of how that capital could have been used elsewhere that you can measure the value for shareholders.
yetanotherphd 13y ago
If only potential shareholders (at the time of the IPO) were equally in love with this idea.
pjc50 13y ago
Amazon primarily passes value to customers, and squeezes its lower employees and suppliers.
PilateDeGuerre 13y ago
>passes on all the value to employees and contractors...instead of extracting that value their employees create I was surprised to read your analysis of the situation. I must say that you're just flatly wrong. Amazon is not a good place to work if you value your life outside of its value for your employer. Everyone from warehouse employees to the knowledge workers are sweated for everything they are worth. Recall that Amazon runs their warehouses like prisons and they have the lawsuits to show for it[1]. [1] http://www.mcall.com/news/breaking/mc-amazon-integrity-wage-lawsuit-20131007,0,2581276.story http://www.mcall.com/news/breaking/mc-amazon-integrity-wage-...

by bobx11 13y ago

gfodor 13y ago

What you say here doesn't make any sense. Shareholder value is increased by effective use of capital by the company. Plowing your margin back into your business if it can result in growth is good for shareholders, since the stock will rise, whereas plowing that profit into ill-advised acquisitions and executive bonuses is probably less so. At the same time, issuing a direct dividend to shareholders when there is little use for that capital for future growth is (obviously) good for shareholders, but issuing the same dividend when that money could have been used to increase the market cap of the business through growth is bad. In other words, the specific mechanism of how a company uses profit (or more specifically, free cash flow) does not have any inherent value to shareholders (dividends, buybacks, paying down debt, or re-investment.) It's only in the context of the opportunity cost of how that capital could have been used elsewhere that you can measure the value for shareholders.

yetanotherphd 13y ago

If only potential shareholders (at the time of the IPO) were equally in love with this idea.

pjc50 13y ago

Amazon primarily passes value to customers, and squeezes its lower employees and suppliers.

PilateDeGuerre 13y ago

>passes on all the value to employees and contractors...instead of extracting that value their employees create I was surprised to read your analysis of the situation. I must say that you're just flatly wrong. Amazon is not a good place to work if you value your life outside of its value for your employer. Everyone from warehouse employees to the knowledge workers are sweated for everything they are worth. Recall that Amazon runs their warehouses like prisons and they have the lawsuits to show for it[1]. [1] http://www.mcall.com/news/breaking/mc-amazon-integrity-wage-lawsuit-20131007,0,2581276.story http://www.mcall.com/news/breaking/mc-amazon-integrity-wage-...