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
Why You Should Put YOUR MASK On First (My Brain Without Oxygen) - Smarter Every Day 157
All right, I’ll make it super fast. It’s me, Destin. Welcome back to SmarterEveryDay. When you’re in a jet, if the cabin depressurizes, they drop this little mask out of the top. What happens if you’re in a depressurized cabin and you’re up above 15,000 f…
Mars Season 2 – Trailer | National Geographic
There are other human beings on Mars now. Coexistence may prove just as challenging as it does on Earth. ELON MUSK: Mars civilization ultimately looks like an advanced version of Earth. SUSAN WISE BAUER: Industry is going to be absolutely vital to that …
Lecture 17 - How to Design Hardware Products (Hosain Rahman)
Very exciting! And thank you, Sam, uh, for having me. Sam and I have known each other for a long time because we were fellow Sequoia companies, and we met in the early days of when he was on his, uh, company journey. So it’s cool! So what he asked me to t…
Private jet expert destroys noobs
Why did you have a private jet? Yet, because it’s the stupidest investment in history, you’re going to spend $25 million on something that is going to cost you almost $10 million a year. It’s okay; the guy completely doesn’t know what he’s talking about.…
Planning Our Route to Mars | MARS: How to Get to Mars
Before we get through the first half of this century, humans will be living and working on Mars. We can do it with the kinds of technology we either have today or know how to build today. Let’s think about how we go about this thing, okay? This journey to…
Constitutional powers of the president | American civics | US government and civics | Khan Academy
So this is here, um, I’m here with Jeffrey Rosen, head of the National Constitution Center, and we’re going to talk about Article Two of the United States Constitution. So, Jeffrey, what does Article Two deal with? It deals with the executive power, the…