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
The reason I'm single
Lots of you guys, it’s Graham here. So here we go! I’ve gotten way too many comments from people asking about my relationships, what I think about dating, what it’s like dating when people know you have money. And then, of course, a lot of people seem to …
The Soul of Music: Meklit Hadero Tells Stories of Migration | Overheard at National Geographic
[Music] Hey there, I’m Kyrie Douglas. I’m a producer here at Overheard, and this is the final episode of our four-part series focusing on music exploration and Black history. It’s called “The Soul of Music,” and National Geographic explorers will be sitti…
How Understanding the Typical Life Arc can Give you Perspective
Most people’s lives are, there’s a life arc, and most people’s lives transpire in like ways that you could see over and over again. You know, so I break it down. It seems to me like there are three big phases in life. The first phase is you’re dependent …
Trigonometry review
I want to do a quick overview of trigonometry and the aspects of trig functions that are important to us as electrical engineers. So this isn’t meant to be a full class on trigonometry. If you haven’t had this subject before, this is something that you ca…
Calculating slope from tables | Linear equations & graphs | Algebra I | Khan Academy
We are asked what is the slope of the line that contains these points. So pause this video and see if you can work through this on your own before we do it together. All right, now let’s do it together and let’s just remind ourselves what slope is. Slope…
Why Cancel Culture Sucks
In 1951, students at Swarthmore College were the subject of a curious experiment. Solomon Asch designed the experiment in which a few students would have to complete a seemingly easy task. Students would be shown a card with a line drawn on it. Then, they…