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
What's in a Lichen? How Scientists Got It Wrong for 150 Years | Short Film Showcase
My favorite thing about lichens is that they’re always out there. So anytime you go on a walk and go on a bike, go float the river, you can go out and collect. Like, it’s into a winter when you’re skiing. You only see lichens; so like, until they cover ab…
Diane Greene's Advice for Founders
Hi everyone! I guess I’m miked up. I can stand right here. Um, I’m just here to introduce our next speaker, who’s one of my just favorite people, Diane Green. She is, you all, I’m sure know her, so she needs no introduction. But she’s the chief of Google’…
How To Think Like A CEO
You can’t see the bigger picture, and you can’t work toward a bigger goal if you’ve got the perspective of a worker. That’s the facts. If your brain isn’t used to thinking like those who are achieving big things, you will struggle to find your footing. Ev…
How I Helped My 6th Graders Ace Math... By Taking Them Back to Kindergarten! | Mastery Learning
Hey everyone, this is Jeremy Shifling at Khan Academy. I just want to thank you for taking time out of your super busy weeks to spend time on today’s session, and I want to give a super special thanks to Tim Vandenberg, who’s been gracious enough to share…
How to drive an Exotic Car for Free (Top 10 Best Cars)
What’s up you guys, it’s Graham here. So, this has been the most requested video topic in the history of the entire YouTube internet, and that is: how to car hack and drive an exotic car for free. I’ve been pretty fortunate that, with the last two sports …
Jacksonian Democracy part 3
All right. In the last video, we talked about the election of 1824, which turned into a grudge match between John Quincy Adams and Andrew Jackson, in which Andrew Jackson won the popular vote, but John Quincy Adams won the electoral vote. The tiebreaker t…