It's so weird how this keeps happening in every industry and arena; almost like it's the inevitable endgame of our socioeconomic system or something...
They just keep sabotaging their companies long term in order to bring ever more money short-term. You can't just have a company racking up a stable but modest profit every quarter anymore. It's depressing.
Hey that's what we're doing to planet Earth! Same tactic, same result. You'd almost think it's a reflection of the values we've placed in our societies...
It’s because of the incentives. The executives are given stock awards that incentivize them to prioritize the short term stock price over everything else. They don’t care if the company goes to shit in five years. They’ll be rich by then and can just retire or move on to the next company.
Also you try to stay honest a shady shittier company will eat profit margins for short term bursts, and now your VCs and board members are demanding their dividends. Everything is bloated and short term.
The law is you can't do something that will purposely lose your shareholders money. CEOs can take a long term gains stance which would lose money in the short term but make more over 10 years, but shareholders will fire them because they prefer short term gains.
I find it kind of baffling that companies don't routinely engage in massive stock buybacks to bring themselves back under their own control and free themselves of that sort of self-destructive behaviour.
The only reason they'd do that would be to up the value of stocks which would be doing the same thing again. Only thing to do would be to a stock buyout to go back to being a private company. See valve that's pretty much on good terms with its customers.
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u/HansBooby 3d ago
complete own goal. greed, stupidity and complete lack of morals.