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thephyber 19 hours ago

What makes you think “they don’t understand the interest they have to pay”?

They are optimizing for short-medium term profits. The people there in the early days pull the ejection code when the “interest” is due. The company coasts until some private equity runs the numbers and realizes the parts are worth more than the whole.

This is capitalism. You are using “interest” (a finance term) seemingly in a moral / ethical critique. If so, use a moral / ethical term instead.

frollogaston 15 hours ago | parent [-]

Corporate valuation isn't about short-term thinking. It's actually all very long-term. Plenty of companies are not paying out all their profits to shareholders, and their valuation is entirely based on expectation that it'll happen in the distant future and the discounted perpetuity value will equal the initial investment, probably after the current investors are dead.

There are still plenty of vulture investors who find a way to trick the market in the short-to-medium term. I'm not convinced Facebook is a case of that, even though I hate what they do.