> They were already a publicly traded corporation. Their interests have never been aligned with yours fundamentally, they've been aligned with a fiduciary duty to make profit for shareholders. Literally nothing about the profit motive has changed.
This is a trope that needs to stop. Public companies are not alike and the fiduciary duty is only a very high level one that can be used to justify both squeezing every customer as much as possible to losing money to support growth.
What the shareholders want matters and an acquisition changes that completely.
>> But the CEO of a publicly-traded company expressly does not have the option of sacrificing profits for any higher purpose, unless that directive comes from his shareholders.
>Going public does mean that your company is obliged to maximise shareholder profit, rather than achieve whatever goals the founders envisioned.
and
> And what exactly is the interest of the shareholders, rather than maximising share value / dividend payout?
Wait. By your own logic why would anyone invest in anything that wasn't public if you were just throwing money at some dude that wanted to do something that wasn't in your interest? Your logic makes no sense. It sounds like you're saying, it's sad that founders don't get to spend money anyway they want without carrying about the wishes of who gave them the money.
> A public company in case you forgot is an institution designed to create value for share holders.
I don't know much about US law regarding this, but I thought the only thing a public company shouldn't do is destroy value. I don't think a company has the obligation to specifically pursue the cheapest/fastest way to do something. Directors and executives have some freedom to run things as they see fit, but won't abuse their freedom to not be voted out of the company; not because the courts would punish them for it.
> a company that is traded publicly cannot have a long term goal
You think Apple or Berkshire Hathaway have no long term goals? Why make such sweeping statements that are easily shown to be wrong, when you can make a more nuanced and possibly true statement easily?
> Most of the companies that have had long term clout or tried to invest in long term research have been acquired and butchered by venture capitalists for a quick payday.
See, this might well be true and point to a real problem.
Though I think the notion that public markets are dumb and impatient and private markets are wise and long-term is a caricature itself.
> As a CEO of a company that is being sold you can not make any binding statements about the future of the company you will no longer own.
That's objectively not true. There are countless stories of companies unwittingly buying liabilities and lawsuits that they didn't know about or fully appreciate.
If you go public, you have zero control of who owns your company. It's not more ethical - it just launders your ethical responsibility.
There are plenty of people or organizations - who also happen to have a horrific ethical record - who can buy shares in a private company. And there's nothing you can do to stop that.
This argument for public comapanies needs to be de-bunked. This isn't a real thing, "fiduciary duty" means don't burn money and don't fraud your investors not don't do a slightly-less-shortterm business decision.
Also zuck owns a majority, so even if it was a real thing, if he approves, no other shareholder's opinion on duty matters.
Fiduciary duty to who? The shareholders that cashed in today are the same ones who are behind the IPO. You're trying to make it seem like some poor distant shareholder got screwed over, which is not true.
> However, I still take issue with the statement that a corporation is not "owned" by the shareholders. As a matter of law, a corporation is owned by the shareholders.
As a matter of law a corporation is not:
> Simply and clearly, the corporation owns its own assets. In the simplest terms, a private company became a public company when the original owners gave up ownership. In turn, they received a stock certificate outlining certain rights to profits and other privileges. What they got, again, was a stock certificate not a certificate of ownership. The word “ownership” does not appear in that document. Additionally, while the shareholders are entitled to a portion of profits, as shareholders, they are no longer exposed to liabilities of the companies in which they hold shares.
> This paper demonstrates that shareholder ownership, a sacred cow of business, is a myth. According to our legal system, shareholders do not own the Modern Corporation itself, nor do they own the corporate assets or profits. […]
> companies were forced to prioritize shareholders above all else
Publicly traded companies have to state what they prioritize. It's as simple as that. If they don't, they must prioritize profit, but not short-term profit.
That rule is usually blown out of proportion, it just can not explain the modern companies behavior.
(But yeah, they must prioritize shareholders. That means that the shareholders are the ones that decide that stated priority, into whatever they want.)
> Legally, I don't know if there is an issue with that, but I see a moral one: you shouldn't be bringing a company public if you can't think it will grow further. It's a misuse of the public markets.
How so? The point of a market is for willing sellers to make deals with willing buyers. What person would sell a company (or any asset) when they thought the public market undervalued it?
This is a trope that needs to stop. Public companies are not alike and the fiduciary duty is only a very high level one that can be used to justify both squeezing every customer as much as possible to losing money to support growth.
What the shareholders want matters and an acquisition changes that completely.
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