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
50 Years Ago, This Was a Wasteland. He Changed Everything | Short Film Showcase
[Music] 50 years ago, you couldn’t hardly walk through this place. It was wall to wall. [Music] Brush! There wasn’t any grass, there wasn’t any water. Nobody wanted. [Applause] It on the truck, on the truck! He’s the finest dog in the United States of Am…
Later Stage Advice with Sam Altman (How to Start a Startup 2014: Lecture 20)
All right, uh good afternoon and welcome to the last class of how to start a startup. So, this is a little bit different than every other class. Every other class has been things that you should be thinking about in general at the beginning of a startup. …
Digging the Scrap Heap | Port Protection
Most of the people who live in the bush are fiercely independent, and I don’t suppose when I’m any different. Today I’m scrounging. Well, I’m just trying to procure enough pieces of old steel now I can get together, and I can throw together a prototype of…
Worked example: Calculating the maximum wavelength capable of ionization | Khan Academy
We’re told that the first ionization energy of silver is 7.31 times 10 to the fifth joules per mole. What is the longest wavelength of light that is capable of ionizing an atom of silver in the gas phase? All right. Now, before I even ask you to pause an…
Innovation Requires Decentralization and a Frontier
Innovation requires a couple of things. One of the things that it seems to require is decentralization. I don’t think it’s a coincidence that the Athenian city-states, the Italian city-states, or even the United States, when it was more free-form and invo…
How Much Does a Shadow Weigh?
Hey, Vsauce. Michael here. And I’m sure that we all love to have fun with hand shadows, but how much does a shadow weigh? It might sound like a silly question, because it is. I mean, a shadow cannot be put on a scale and weighed. But the material that it…