I've never seen anyone directly make this case. Most people seem to want their colleagues (many of whom are friends) to keep their jobs more than they want the stock price to go up.
The entire purpose is so that they can juice up the numbers for when they announce quarterly numbers.
For the kind of executives that stay at a company like Intel, the only thing they care about is the company’s stock price, and they’ll do anything to keep it high, even if it’s at the expense of what quite literally is destroying or directly hemorrhaging in the long term to the company itself. It’s how you end up with crazy situations like this.
Employees are generally the worst judges of whether or not a company's stock price will go up. They have far too vested an interest to make an unbiased assessment, and most people anyway don't know what the markets are looking for in terms of making the stock price go higher.
It provides a proxy to whether the management is looking to increase worker morale and productivity for long term gains, or inflate stock prices for short term gains. It also provides a way to compare companies within an industry, to see which might be overpaying management, with stock returns varying accordingly.
Stock prices reflect a prediction about future profitability or company value, not how nice the company is. The stock going up shows that people who invest in Meta think layoffs will increase profits. That's all.
Stock prices are (generally speaking) about the sentiment of the long term performance of a company. The coronavirus has caused a lot of setbacks but it's only a short term problem. As long as a company can survive this short term loss of productivity there is no need for the stock valuation to be lowered.
Perhaps there is an large internal pressure from the employees themselves?
If many employees have a large amount of salary dependent on the stock price, then those employees will really care about GOOG falling in price on the market.
The companies are doing it for a short term stock price bump. They are always incentivized to think short term because of the way our distorted markets work.
Unless the company is trying to do a primary raise, which most companies do only once in a blue moon, the price of the stock is fairly irrelevant to the operations of the company.
I feel it's more market psychology in many cases - having to demonstrate to the analysts that you're being fiscally prudent (hence the commonly resultant stock price increase) rather than any particular internal need. It's a shame that perfectly decent people are being let go so that some Wall Street Chad can make a check mark.
I honestly don't understand why the stock price would increase with this. It seems to me that all they did was add a layer of bureaucracy (or just shuffled it around).
I honestly don't understand why the stock price would increase with this. It seems to me that all they did was add a layer of bureaucracy (or just shuffled it around).
Which employer would ever say: "ah man it's all fucked up. Our productivity is completely gone. We're not getting anything done"
Imagine what that would do the stock prices
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