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
Homeroom with Sal & Kristen DiCerbo PhD - Wednesday, September 23
Hi everyone! Sal here. Welcome to our homeroom live stream. We have an exciting show! We’re going to have Kristen D’Serbo, Khan Academy’s Chief Learning Officer, answering any questions you have about motivation and having more independence as a learner. …
Humanity's Fascination with Mars | MARS
Dreamers of space have always had their eyes there, their hopes, their aspirations on getting to Mars. It has to look at the sky, saw that thought, and wondered what’s on it. As soon as people understood what planets were, some of them said, “Wouldn’t it …
how to learn a language on your own | study tips 📚🌎
Hi guys, what’s up? It’s me, Dudy. Today, we’re gonna talk about how to learn any language on your own, and I’m gonna give you some study tips and also the methods that I’m gonna use for learning Italian because I moved to Italy and I don’t know Italian …
Warren Buffett's Warning for the Banking Crisis and 2023 Recession
This video is brought to you by Seeking Alpha. Get a 14-day trial of Seeking Alpha Premium via the link in the description. Anticipating a few questions on banks, I decided we should start using bank language here. Subscribe, please, and [Applause]. Char…
The Science Behind Dogs' Incredible Sense Of Smell
In this US Government lab, they study air flow to solve crimes. Using mirrors, lights, and lasers, they can illuminate the tiniest differences in air temperature and density, and track how drug powder settles in the rooms of a house, determine which perso…
Finding zeros of polynomials (1 of 2) | Mathematics III | High School Math | Khan Academy
[Voiceover] So, we have a fifth-degree polynomial here, p of x, and we’re asked to do several things. First, find the real roots. And let’s sort of remind ourselves what roots are. So root is the same thing as a zero, and they’re the x-values that make th…