Diluting the shares is only a bad thing if the companies overall value (called “market capitalization”) is constant (or grows slower than the dilution). If, for example, a company has 9k shares outstanding, sells another 1k shares (10% dilution), uses the money to expand the business, increasing profits, and as a result the value of the company doubles (meaning share prices almost double), the owners of those first 9k shares should be quite happy about that.
I’m unsure what problem you are trying to solve with your proposal for investors to pay money to the companies they own shares of. What it actually sounds like to me is a buy back. Sometimes companies buy shares of their own stock from the market, decreasing the number of outstanding shares (the reverse of dilution). For the shareholders who sell the stock back to the company, they are being directly paid for their investment. For the shareholders who do not, the supply of stock in that company has decreased, which results in an increase in the value of the remaining shares.
I think you also need to realize that having stocks like this isn’t just about raising capitol, it is also about creating a check on the CEO and other managers. The shareholders elect the board of directors, which has the power to hire and fire the CEO, among other things. Without stock, who would the CEO have to answer to? Powerful unaccountable people are not a thing I want running around in society.
I’m unsure what problem you are trying to solve with your proposal for investors to pay money to the companies they own shares of
It was “Could we get that money to do something better, then?”
It is possible for speculation to be rewarded more than is useful, I suspect that it’s quite common.
Powerful unaccountable people are not a thing I want running around in society.
A part of me laughs at the idea of holding tech accountable and prepares for the ending where it is not, could not be.
I engaged in some corporate governance yesterday and… I don’t think this one at least was designed to make the company accountable to shareholders, parts of it seemed chosen to preclude that. I think they give an impression of accountability, which must be reassuring to some people. One big advantage I sense is to the company; the governance process solicits motivated feedback from many parties. They will ultimately use the feedback however it benefits them.
Diluting the shares is only a bad thing if the companies overall value (called “market capitalization”) is constant (or grows slower than the dilution). If, for example, a company has 9k shares outstanding, sells another 1k shares (10% dilution), uses the money to expand the business, increasing profits, and as a result the value of the company doubles (meaning share prices almost double), the owners of those first 9k shares should be quite happy about that.
I’m unsure what problem you are trying to solve with your proposal for investors to pay money to the companies they own shares of. What it actually sounds like to me is a buy back. Sometimes companies buy shares of their own stock from the market, decreasing the number of outstanding shares (the reverse of dilution). For the shareholders who sell the stock back to the company, they are being directly paid for their investment. For the shareholders who do not, the supply of stock in that company has decreased, which results in an increase in the value of the remaining shares.
I think you also need to realize that having stocks like this isn’t just about raising capitol, it is also about creating a check on the CEO and other managers. The shareholders elect the board of directors, which has the power to hire and fire the CEO, among other things. Without stock, who would the CEO have to answer to? Powerful unaccountable people are not a thing I want running around in society.
It was “Could we get that money to do something better, then?”
It is possible for speculation to be rewarded more than is useful, I suspect that it’s quite common.
A part of me laughs at the idea of holding tech accountable and prepares for the ending where it is not, could not be.
I engaged in some corporate governance yesterday and… I don’t think this one at least was designed to make the company accountable to shareholders, parts of it seemed chosen to preclude that. I think they give an impression of accountability, which must be reassuring to some people. One big advantage I sense is to the company; the governance process solicits motivated feedback from many parties. They will ultimately use the feedback however it benefits them.