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
“Let Them Scream Whatever They Want” | Marcus Aurelius on Panic
How should we act when people around us are panicking? And how can we avoid panicking ourselves? Panic gets us nowhere, as it is a state of emotional turmoil during which our rationality is thrown overboard. So when we’re faced with a wide variety of opin…
Mind Field Season 2 - Official Trailer
[yelps] Understanding of the human mind isn’t complete unless it considers everything the brain is capable of. ♪♪ When is it okay to risk harm in the name of science? ♪♪ I’m about to find out. ♪♪ I’m a little anxious about what’s about to happen. This wil…
Kevin O'Leary V2
Actually, I was born Terrence Thomas Kevin O’Leary. My dad was Irish and he loved long names, but when they got me home, everybody realized it was going to be total confusion because dad was named Terry too. So the next thing I knew, I was Kevin. Two year…
Elizabeth Warren: The Heart of the Two Income Trap
Most families saw and believed that if he’s at work and bringing in a certain amount of money and we can add my salary on top of things, that’s how it is; we can afford that house in the suburbs. That’s how it is that we can keep health insurance for her …
Dan Savage on the AIDS Epidemic | Generation X
People didn’t believe that our love was the equivalent of heterosexual love. Uh, not even people who considered themselves down with the gays believed that. I think it was Harvey Milk in “Torse Trilogy” who said that it would be great one day if we all gr…
Mastery Learning in Mr. Vandenberg’s Class
I’m Tim Vandenberg and I’ve been teaching for 25 years: 17 years in Hesperia, California, 6th grade at Carmel Elementary School. Hesperia is a lower socio-economic status area on average, especially among our student population. 100% of our students at th…