Comment on Nvidia insists it isn’t Enron, but its AI deals are testing investor faith
U7826391786239@lemmy.zip 11 hours agohe’s got nothing to worry about. when they crash down to $1, trump will call it a “matter of national security” or some shit, and then bail them out, courtesy of your tax dollars and my tax dollars. because they actually want the AIs for their police state surveillance
You can’t really bail out a stock price though…
I guess you could provide a guaranteed backstop to sellers and funnel the stock to the government, as Trump seems to love doing, but then you end up with a $3T of over-valued assets that you can’t do anything with.
wewbull@feddit.uk 11 hours ago
The company doesn’t care if the stock price hits $1. If the company is paying it’s bills, it just continues. It’s the people who hold shares that care. The company doesn’t hold shares in itself.
Enron collapsed because the company financials collapsed, not because the stock price collapsed. That happened after all the bad accounting practises and hidden debt came to light. Now, in that case the shareholders succeeded in suing for their losses, but they only had a case because of the mismanagement.
UnspecificGravity@piefed.social 9 hours ago
The company absolutely does own shares of itself and it’s ability to secure credit and just engage in business in general depends of the value of that holding.
wewbull@feddit.uk 5 hours ago
No. The board can decide to issue more shares, but this is a sub-dividing of the already issued shares and so normally requires a vote from the shareholders. Major shareholders normally sit on the board, so the two groups overlap but are legally distinct.
If a company buys it own shares, it’s normally a “buyback” and the shares cease to exist.
panda_abyss@lemmy.ca 9 hours ago
It does impact employee morale when they get paid with stock incentives and they go to zero.
wewbull@feddit.uk 5 hours ago
Of course. They are shareholders.
The company is a separate legal entity though.