> The moment a company goes public they're legally required to make stupid, short-term decisions that are worse for everyone

FWIW this is a myth.

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everdrive 4 hours ago | parent | next [-]

Maybe it's overstated? It cannot possibly be a myth.

	▲	BugsJustFindMe 4 hours ago \| parent \| next [-]
		No. Public companies are absolutely allowed to engage in long term strategies like "don't burn the future and reputation of the brand to temporarily juice near-term profit". The reason they don't is because the people making the decisions don't care about the future of the brand and do care about near-term profit.
	▲	shagie 4 hours ago \| parent \| prev \| next [-]
		https://law.justia.com/cases/delaware/supreme-court/1990/571... > Second, absent a limited set of circumstances as defined under Revlon, a board of directors, while always required to act in an informed manner, is not under any per se duty to maximize shareholder value in the short term, even in the context of a takeover.
	▲	JumpCrisscross 4 hours ago \| parent \| prev \| next [-]
		It’s absolutely untrue. It’s why companies are legally allowed to burn money on questionable investments or donate to political candidates if their Boards are fine with it.
	▲	usefulcat 3 hours ago \| parent \| prev \| next [-]
		In the case of the US, "legally required" is a myth. A common one, but a myth nonetheless. > To quote the U.S. Supreme Court opinion in the recent Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.” https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
	▲	4 hours ago \| parent \| prev \| next [-]
		[deleted]
	▲	zbentley 4 hours ago \| parent \| prev [-]
		An adjacent commenter explained further: https://news.ycombinator.com/item?id=50209678

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MrFantastic 4 hours ago | parent | prev | next [-]

Short term thinking is because of incentives. Executives are given options so they want to juice the stock price while they are CEO.

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intended 3 hours ago | parent | prev [-]

eh...

You would be right technically.

Practically? a firm that isn't competitive, will have lower multiples, will trade at lower stock prices, and that will make it an attractive takeover target.

Just buy the firm, drop the practices that don't improve stock price, and then pocket the difference.

It doesn't happen all the time, and some firms may have enough of a war chest to avoid this fate.

However, the pressure does exist, and it does drive conformity in behaviour.