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
Elon Musk's Video Game Recommendations
I’m looking for a new video game to play. Can you give me a recommendation? Overwatch. I play Overwatch. Yeah, anything else? Um, Overwatch is amazing. Overwatch is amazing. Yeah, generally Blizzard is great stuff. Um, well, there’s Hearthstone. I…
She Dances With 10,000 Bees on Her Body | National Geographic
For me, wearing the Beast, it’s about communing with another species. I have talked to so many people about fear and bees, and they tell me how they were chased when they were kids because they’d see me wearing the bees. I think that they realize that you…
Persistence Of Vision
So tonight I’m hanging out with my friend Nigel, and he’s brought along one of his science toys—a little white plastic ball. Um, it’s not actually a white plastic ball at all. You told me you were bringing the white plastic ball tonight. It’s, uh, what co…
Identifying a sample and population | Study design | AP Statistics | Khan Academy
Administrators at Riverview High School surveyed a random sample of 100 of their seniors to see how they felt about the lunch offerings at the school’s cafeteria. So, you have all of the seniors; I’m assuming there’s more than a hundred of them. Then the…
Think on it | Barkskins
Mathilde: One only has to say the word “English,” and they come running like sick black dogs at low tide. Captain: Well, I heard about your selfless heroics with the Iroquois and the tragedy with the priests. Well, I suppose there’s nothing more that nee…
Homeroom with Sal and Wendy Kopp - Wednesday, September 15
Hi everyone! Sal Khan here from Khan Academy. Welcome to the Homeroom live stream! It’s been a while since we did one, but we’re back and we have an amazing guest, Wendy Kopp, CEO of Teach For All, also the founder of Teach For America. We’re going to ta…