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 rising inequality necessarily bad
The word inequality, by its very nature, at least sounds a little bit unfair. Obviously, everyone’s not getting the same thing; they’re not getting the same income, or they don’t have the same wealth. But a question needs to be asked: Is this necessarily …
Line plots with fractions
What we’re going to do in this video is review what we know about line plots but apply them in a situation where some of our data involves fractions. So, they tell us the lengths of some caterpillars are shown below and so we can see that here in the line…
Signs You are Moving From Middle Class to Wealthy
You know, it’s easy to tell when someone moves up from middle class, when you know the signs you see. It’s not just about the bank balance. It’s a complete overhaul of your life’s blueprint. Here are ten clear signs you’re moving from middle class to wea…
Place value with decimals
What we’re going to do in this video is refresh our understanding of place value, but we’re going to dig a little bit deeper and think about place value in the context of decimals. So just as a refresher, if I had the number 973, this should be review fo…
What Does Freedom Mean to You? | The Story of Us
Freedom is different things to different people. What do you think freedom is? [Music] Dear Slaw, Paul de Leeuw, betta em, but I feel of its own oxygen. Freedom, I don’t know who was attempting bullets. Na la libertad me is so I’ll see. Ali effective a …
My Life Advice for Teenagers
At this part in your life, you physically and mentally change so that you become an independent adult. At least you want to become an independent adult. And so, you have to recognize that, where in the past maybe your relationship with your parents and re…