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
2015 AP Calculus BC 2d | AP Calculus BC solved exams | AP Calculus BC | Khan Academy
Find the total distance traveled by the particle from time t equals zero to t equals one. Now let’s remember, they didn’t say find the total displacement; they said find the total distance traveled by the particle. So if something goes to the right by on…
BEST IMAGES OF THE WEEK: IMG! episode 2
You guys asked for it, so here it is. Whether it’s Mario Brothers from Mario’s perspective, or a girl gamer who seems to be saying, “Uh yeah, size does matter,” it can only mean one thing: Episode 2 of [Music] IMG. This week, BuzzFeed brought us some of …
Khan Academy Ed Talks - Reimagining School with Sal Khan, Rachel E. Skiffer, & Kim Dow
Hi everyone, Sal Khan here from Khan Academy. Welcome to Ed Talks! You could view this as a flavor of our homeroom live stream that we’ve… we, we focus more on education topics. Uh, first of all, I want to wish everyone a happy new year! Hopefully, your …
The Wonders of Urban Wildlife | Podcast | Overheard at National Geographic
So I’m a solo hiker. I prefer to hike alone, and I’m a meanderer, so I have no idea where I’m going. It’s July 2021, and I’m meandering with Danielle Lee, a biology professor at Southern Illinois University Edwardsville. We are in our neighborhood in Nort…
Signs You're in a Cult
I know that deep down, you feel like your life lacks meaning. The daily grind wears you down, leaving you feeling broken and lonely. You’ve got work stacked on top of school, compounded by chores and errands, and there’s just no time for you to experience…
The Simplest Math Problem No One Can Solve - Collatz Conjecture
This is the most dangerous problem in mathematics, one that young mathematicians are warned not to waste their time on. It’s a simple conjecture that not even the world’s best mathematicians have been able to solve. Paul Erdos, a famous mathematician, sai…