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
Walking Alone in the Wilderness: A Story of Survival (Part 2) | Nat Geo Live
Why I’m here today, talking to you, here, in this amazing special place? It’s because of a slug story. Basic slug story, you know how those stories go? You know, I couldn’t have my pocket money when I was a kid. Grow up in Switzerland. Picture this. This …
World’s Weirdest Theme Parks | The Strange Truth
Some people think that Walt Disney invented the theme park, but that’s not really right. Is it? Um, there’s a tendency of Americans to think that we have kind of a patent on theme parks. The export of things like Disneyland or Universal Studios that are g…
15 Ways to Safe Guard Sudden Wealth
So you just sold your business, sold some land for 100x what you paid for, inherited a lot of money, retired rich, or won the lottery. Now what? Need a game plan, my friend? And by the end of this video, you’ll not only know the most effective ways to nev…
Worked example: Calculating the amount of product formed from a limiting reactant | Khan Academy
So right here we have a reaction where you can take some carbon monoxide gas and some hydrogen gas, and when they react, you’re going to produce methanol. This is actually pretty interesting; methanol has many applications. One of them, it’s actually race…
Walking away from marriage, children, and other stuff we're supposed to have
You want someone to grow old with? You want someone to be a mother for your children, assuming you want children? And if you don’t want children, well, you probably will, and if you don’t, you’re either deluded or immature. And you might say, “Well no, th…
Green Flags Of Financially Educated Person
One of the biggest problems that plagues the happiness of this world is a lack of financial education. Too many people have little to no understanding of how money moves around the world, and you can tell when someone is financially educated by checking f…