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
Is This What Quantum Mechanics Looks Like?
Check this out! I’m using this speaker to vibrate a petri dish containing silicon oil. Now, if I take this toothpick and make a little droplet on the surface, the droplet will stay there, hovering above the surface. The droplet is actually bouncing, and i…
Birth of the Slacker | Generation X
Most Gen Xers are in school during the crash, so at first they think, “Like, so what?” I’d never quite understood the stock exchange game enough to be interested. I would like to meet this Dow Jones; I thought he was a guy in all the Disney movies. I viv…
Latest Grand Seiko Watches Revealed | Watches and Wonders 2024
For accuracy for craftsmanship, Grand Seiko has for a long time beaten pretty well. [Music] Everybody, Grand Seiko has nine new pieces introducing them here at Washington Wonder Geneva 2024. Let’s get down into them because we’re going to see a complete s…
The Student's Guide To Becoming A Successful Startup Founder
Your job is to be an optimist. Your job is to believe amazing things about what you can do with your life and what you do in the world when you’re young. That’s the point. That’s the point. That’s why the world needs young people. [Music] This is Michae…
Tracing program execution | Intro to CS - Python | Khan Academy
Let’s trace a program step by step. This is a common pattern we’ll use to understand what the computer is doing under the hood when we press the Run button. Tracing program execution like this helps us better read and write programs because we can start t…
BULLET TIME FAIL (Slowmo) - Smarter Every Day 101
Surprised you had it running at full speed. Hey, it’s me, Destin. Welcome back to Smarter Every Day. This is Mark Rober. Mark is using me. Is this true or false? - [laugh] - Mark is using me to access your subscribers. I’m not really happy about this, Mar…