yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

Stock are not backed by the company. Simple Logic


2m read
·Nov 3, 2024

Busted open, our stock went down to six. It went from 113 to six in less than a year. That whole period is very interesting because the stock is not the company, and the company is not the stock. Stocks are not backed by the company; that is why investors don't know how much their stocks are backed by.

If something is backed, it means you're going to get a definitive amount of money back for whatever you're holding, or there's some kind of accessible collateral. So if Google is trading for two thousand dollars, and the assets on their balance sheet amount to something like a thousand dollars a share, it would be fair for you to assume that Google stocks are backed by a thousand dollars.

The problem is, that's not how it works. If you look at their SEC filings, there isn't a single public company that says they will back their stocks by some defined price. So in practice, they don't have to give you anything.

Now, hypothetically speaking, stocks are backed in the sense that if Google goes out of business, liquidates, pays back their debts, and insiders, whatever's left over will go to the shareholders. The problem is, when the hell is that going to happen? And how much is going to be left over in this hypothetical liquidation?

The potential for a future liquidation or buyout are considered unfalsifiable ideas. No one can show to be right or wrong. It is pseudoscience nonsense that cannot be used in a logical debate. Hypothetically speaking, anything can happen, but you can't use a hypothetical idea to debate the observable fact that if Google crashes tomorrow, as per their SEC filings, they have no definitive obligation to pay their shareholders anything for the stocks they are holding.

More Articles

View All
Autoionization of water | Acids and bases | AP Chemistry | Khan Academy
The autoionization of water refers to the reaction of water molecules to form two ions: the hydronium ion, which is H3O⁺, and the hydroxide ion, which is OH⁻. Water can function as an acid or base, and in this reaction, one water molecule functions as a B…
Model Context Protocol (MCP), clearly explained (why it matters)
Greg: Everyone is talking about mcps, it’s gone completely viral, but the reality is most people have no idea what mcps are and what they mean and what are the startup opportunities associated with it. So in this episode I brought Professor Ross Mike who …
Jessica Brillhart, Immersive Director, on VR and AR
So, you started your company this year. My great question: So, this actually ties into my past, actually. I was at Google for years. I started as their first filmmaker with the Creative Lab. I moved on five years later into the Google VR team, which is no…
Tim Brady - How do you calculate burn rate, runway and growth rate?
[Music] So how do you calculate burn rate, runway, and growth rate? Let me first start by saying that these are three very important metrics that are critical for you to manage your early stage startup. Every investor that you talk to will ask you for the…
Warren Buffett on Bitcoin: Has His Opinion Changed?
Bitcoin, it’s ingenious and blockchain is important, but Bitcoin has no unique value at all. It doesn’t produce anything. You stare at it all day and no little bitcoins come out or anything like that. It is a delusion, basically. One point this weekend y…
Carolynn Levy - Modern Startup Funding
I like Kevin said, I’m going to talk about modern startup financing. I have only been practicing law for 21 years, so what’s old and what’s new only spans that timeframe for me. But I’ve seen a lot of changes to the startup ecosystem. YC has been a big pa…