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
Comparing fractions word problems
We’re told that Katie made a table to show how much time she spent on homework last week. So, we can see the different subjects and then how much she spent in terms of hours. So, on math, she spent three-fourths of an hour, reading seven-eighths of an ho…
Jeremy Rossmann of Make School on Income Share Agreements and the Future of College
Okay, Jeremy Rossmann, welcome to the podcast! Jeremy: Glad to be here! Interviewer: You are one of the cofounders of Make School. So, for those who don’t know, what is Make School? Jeremy: Make School is a new college in San Francisco. We offer a bach…
Last Season on MARS | MARS
Getting to Mars will be risky, dangerous, but it will be the greatest adventure ever in human history. Funny thing about Mars, it feels like Earth, but it is more hostile to life at any place on Earth. Ignition in the absence of gravity, lots of things ca…
Do People Understand The Scale Of The Universe?
[Derek] Do people really understand the scale of the universe? Damn, really? That’s… okay. This task is going to seem ridiculously easy. Rank these things from smallest at the top to biggest on the bottom. But sometimes you have to ask the question no o…
2015 AP Biology free response 6
In an attempt to rescue a small, isolated population of snakes from decline, a few male snakes from several larger populations of the same species were introduced into the population. In 1992, the snakes reproduce sexually, and there are abundant resource…
Nvidia Stock is Getting Insane.
Mad money! We love garbage. Do you get your daily news from Wall Street Bets? Is “The Wharf of Wall Street” your favorite movie? Do you call of duty by day and crypto mind by night? Hi, I’m Chad Carlson Wallace, and over the past few hours I’ve been doin…