They actually have a legal obligation to maximize profits.
Comment on Microsoft CFO calls for 'intensity' in an internal memo, after blowout earnings
jordanlund@lemmy.world 3 weeks ago
Publicly traded companies have to continually make more money than they did last month, last quarter, same time last year.
Failing to do so means they are somehow “losing” money that is “rightfully owed” to them and the stock market punishes them.
It doesn’t matter if you’re profitable or not, so long as you’re continually making more money.
onslaught545@lemmy.zip 3 weeks ago
ThirdConsul@lemmy.ml 3 weeks ago
Technically they don’t - it’s a lie told often by CEO. But its a lie. law.stanford.edu/…/Fiduciary-Duties-of-the-Board-…
gandalf_der_12te@discuss.tchncs.de 3 weeks ago
the way i understand it, the company has an obligation to fulfill “shareholder value”, which is maximizing profits in 99% of cases, at least on publicly traded companies.
ThirdConsul@lemmy.ml 3 weeks ago
Same document, section about Shareholders.
There’s no such thing. There COULD be something like shareholders voting on smthing and those votes are binding, but the agenda is declared by the company and can be only shiet like dividends rate, certain acquisitions, etc. Not the company strategy itself.
vithigar@lemmy.ca 3 weeks ago
It goes a layer further than that even. If the rate at which that growth is happening isn’t itself growing then investors start getting nervous.
aramova@infosec.pub 3 weeks ago
Yeah, except for Tesla, how the fuck man.
phoenixz@lemmy.ca 3 weeks ago
I’ll assume that is a rhetorical question? I mean, it’s obvious why Tesla has been going off a cliff and continues doing so
It was 10x overbloated at the least, it’s CEO is publicly a nazi, most claims that Tesla can do were all lies for over a decade now, the only new design it came up with is the cyber truck garbage container, the quality of all the cars is shit (even though they’re overpriced) with the cybershit being literally more explosive than a Ford Pinto, and now there are way WAY cheaper options competing with Tesla. Then add to that that Tesla just decided to give the CEO 26 some billion dollars because that is apparently okay to do during a shitshow like this
Anyone still investing in Tesla gets what they deserve, you’re an idiot if you do
jordanlund@lemmy.world 3 weeks ago
aramova@infosec.pub 3 weeks ago
Mmhmm compare that with the sales numbers, then compare against any company in history which has had a similar sales pattern for a publicly traded company.
DemBoSain@midwest.social 3 weeks ago
It’s not only “more”. The company I work for had “record profits, far and beyond anything we were expecting” in 2021. In 2022, we were told that the company made more than in 2021, but didn’t meet the earnings projections. That’s still record profits, but phrased like a loss.
Not only must the line go up, but it has to go up faster than it did before. Nothing less than exponential growth.
vacuumflower@lemmy.sdf.org 3 weeks ago
It’s supposed to be growth related to the things which didn’t progress, so to say. So it’s not literally supposed to be growth of processes, just that stagnation makes things diminish in value, and compared to them things more alive “grow”. Something like that.
Kinda like inflation. And that’s fine, that can describe a pretty sustainable society, it’s not about consuming more and more, it’s like rotation.
Except with today’s oligopolies there’s a different idea, that they really have to grow as in capturing more and more of humanity’s resources. The AI bubble (or not) is their most recent approach to that.
That’s because expectations were shaped by the 90s when many things exploded (unfortunately much of that were countries, also landmines and other expendable means of destruction).
In the 00s it was possible to create illusion of that explosion still going on brighter and brighter, despite just continuing what started in the 90s, and then to create a few large-scale scams (or madness pandemics, or tech fashions, whatever ; point is they weren’t the same as years 1993-1999) with iPhones, new Apple in general, Google, Facebook, Twitter.
I’m not saying it was fake or worthless, it was a revolution too, but not what companies try to show since the dotcom bubble.
So - they are still trying to show that, with kinda rough, generic, and insincere effort, a bit like sex workers in their makeup.
And they can’t show that without such expansion in width, not in height.