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
Hanging out with a monitor lizard | Primal Survivor: Extreme African Safari
There’s a monitor lizard right there, right on that termite mound, just basking in the sun. They can either play dead or they can run like grease lightning. Let me see if I can get a better look at it. I can see that this monitor could use a little hel…
Warren Buffett: The Best 10 Minutes of Financial Advice on the Internet
Testing one million, two million, three million. That’s working. Okay, talk to you about your financial future, and I hope those figures become applicable to all of you as we go along. And I’d like to start by posing a problem for you. I said I’m just go…
Polymerase chain reaction (PCR) | Biomolecules | MCAT | Khan Academy
I’m here with Emily, our biology content fellow, to talk about PCR or polymerase chain reaction, which you’ve actually done a lot of. Why have you done PCR? PCR was kind of the mainstay of my graduate project, where I built all sorts of different recomb…
Finding inverse functions: radical | Mathematics III | High School Math | Khan Academy
[Voiceover] So we’re told that h of x is equal to the negative cube root of three x minus six plus 12. And what we wanna figure out is, what is the inverse of h? So what is… What is h inverse of x going to be equal to? And like always, pause the video and…
Why being yourself is ruining your life
Just be yourself has become sort of a statement that people venerate these days. People celebrate just be yourself probably because it kind of feels like a warm hug. Just be yourself and everything’s gonna be okay. It feels kind of empathetic, understandi…
Bitcoin Is About To Snap
What’s up Grandma! It’s guys here, so we gotta bring attention to a topic that, in my opinion, is not getting enough recognition. Which I think is surprising because this has the potential to completely change the trajectory in terms of how we transact mo…