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0 pointspb75y ago0 comments

It’s odd to me that you see the mutually beneficial transaction there but not in the stock market.

I will state this once as simply as I can: stock market investors are rewarded for funding companies by taking on that risk in hopes that the companies they invest in produce a profit. It is overwhelmingly similar to the process you are describing with your credit union, but in a much more distributed way.

> Workers don’t need the shareholders, and they get nothing in return (except lower salaries).

There would be no workers if companies didn’t have the capital the needed. So no, the workers very very much need the shareholders. The money has to come from somewhere. No bank is going to bankroll the next Airbnb, Uber, Instacart, DoorDash, etc.

Beyond that, the workers aren’t owed a penny more than they agreed to be paid. If public shareholders didn’t exist, the owners would have full ownership which is what happens with small businesses. Nowhere in these circumstances are workers any better off. Profits and losses are not their domain.

I’m sorry if I sound like I’m talking down to you. It is just that you are a victim of cognitive dissonance possibly due to your unconscious bias against wealth.

0 comments

recursive5y ago

If I buy a stock of a company, how is that funding the company? Only the previous holder of the stock gets the money.

pb7OP5y ago

At some point, the previous holder of the stock was the company itself. That’s called an IPO. Additionally, companies frequently issue new shares to raise money. Tesla has done this multiple times in the past few years.

recursive5y ago

Most of the activity (all of it?) on the stock market seems unrelated to IPOs. Is there any particular reason stocks must be transferable?

1 more reply

runarberg5y ago

Shareholders and investors aren’t the only means of collecting revenue for a business. Alternatives include:

* Setting aside parts of the profit for future investment

* Getting a loan from a bank or your local credit union

* Community or owner funding

Do you honestly think that if it wasn’t for investors businesses would just stop existing? In a world without venture capitalists businesses would need to stand on their own merits, if it is not profitable it will go bankrupt. If it is a popular idea though, a competitor will find a better way of making it profitable, and share that profits with the owners and the workers (and not a shareholder because we don’t need them).

Arguably the existence of venture capitalist markets makes stupid unprofitable businesses out-compete better run businesses, simply by merit of being able to persuade investors.

pb7OP5y ago

> Setting aside parts of the profit for future investment

Companies go public without being profitable. Raising money via IPO is one step to becoming profitable.

> Getting a loan from a bank or your local credit union

No bank is going to loan $100M to a complicated startup with no collateral that needs capital to grow quickly and is unlikely to be able to start repaying for years. This is where VCs come in — they understand complex business models and invest as needed in exchange for equity.

> Community

This is regular investing. The people in your community are not more important than people living elsewhere. Everyone should have an equal opportunity to invest in promising businesses everywhere.

> Owner funding

Bootstrapping is already extremely common and accounts for most small businesses of which there are thousands and thousands. It’s not suitable for big businesses that make global impact. You can’t have a bootstrapped Google or Airbnb or Square.

runarberg5y ago

Now I do think you are just trying to win an argument and not actually debating in good faith.

Community funding includes accelerators such as Y-combinator, wealthy philanthropists, and charities. Heck I didn’t mention it but you could crowdsource the money for all I care... Point is, alternatives exists that are less predatory then shareholders and investors.

> No bank is going to loan $100M to a complicated startup

(Since we are both just trying to win this argument) Perhaps startups that need $100M to get started, and are unable to crowdsource, loan, or community fund that amount simply should exist. Or at the very least, perhaps it should downscale to a more affordable price, earn some profits and scale up as the profits turn in. I’m not gonna cry for a hypothetical startup that failed because they couldn’t raise $100M before they even began the work.

> You can’t have a bootstrapped Google or Airbnb or Square.

So what? I see people complain about Google and AirBnB all the time on this very forum. These are massive companies that have shown predatory and monopolistic behavior time and time again. Maybe the business world would be better if we didn’t have any tech giants. And instead, smaller tech companies would have to collaborate on big scale projects. Remember that we got the CD by a collaboration.

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j / k navigate · click thread line to collapse

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recursive5y ago

If I buy a stock of a company, how is that funding the company? Only the previous holder of the stock gets the money.

pb7OP5y ago

recursive5y ago

Most of the activity (all of it?) on the stock market seems unrelated to IPOs. Is there any particular reason stocks must be transferable?

1 more reply

runarberg5y ago

Shareholders and investors aren’t the only means of collecting revenue for a business. Alternatives include:

* Setting aside parts of the profit for future investment

* Getting a loan from a bank or your local credit union

* Community or owner funding

Arguably the existence of venture capitalist markets makes stupid unprofitable businesses out-compete better run businesses, simply by merit of being able to persuade investors.

pb7OP5y ago

> Setting aside parts of the profit for future investment

Companies go public without being profitable. Raising money via IPO is one step to becoming profitable.

> Getting a loan from a bank or your local credit union

> Community

This is regular investing. The people in your community are not more important than people living elsewhere. Everyone should have an equal opportunity to invest in promising businesses everywhere.

> Owner funding

runarberg5y ago

Now I do think you are just trying to win an argument and not actually debating in good faith.

> No bank is going to loan $100M to a complicated startup

> You can’t have a bootstrapped Google or Airbnb or Square.

1 more reply

j / k navigate · click thread line to collapse

0 pointspb75y ago0 comments

It’s odd to me that you see the mutually beneficial transaction there but not in the stock market.

> Workers don’t need the shareholders, and they get nothing in return (except lower salaries).

I’m sorry if I sound like I’m talking down to you. It is just that you are a victim of cognitive dissonance possibly due to your unconscious bias against wealth.