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
TIL: Hummingbirds Are the World's Hungriest Birds | Today I Learned
If you were to use energy as quickly as a hummingbird, you’d have to eat a fridge full of food or about 300 hamburgers every day in order to survive. They use energy so quickly as they fly, so, so fast. A lot of the flowers they feed on are really delicat…
The Pioneer of Ecstasy in the US | Narco Wars: The Mob
The first time I took ecstasy was in Manchester. Thinking, “What is this? This is pretty boring.” And all of a sudden, my knees just completely buckled, and time just started to stand still. The whole room is just throbbing, and everybody’s dancing, and t…
5 AMAZING Experiments and "Sauciest of the Week" !
Hey, Vsauce. It’s Michael with two big announcements. Count them, two. First of all, there’s a brand new episode of Vsauce Leanback that you can start by clicking the link at the top of this video’s description. This week the topic is crazy and classic s…
Telling time to the nearest minute: labeled clock | Math | 3rd grade | Khan Academy
Let’s look at this clock and see if we can tell what time is shown on it. First thing, when we look at a clock, we have two hands, and that’s because time is told in two parts. Time is told in hours; that’s part, and on a clock, the hours are represented…
Greenhouse effect and greenhouse gases | High school biology | Khan Academy
In this video, we’re going to talk about the greenhouse effect and also the greenhouse gases which cause the greenhouse effect. Now let’s just start with a basic idea. Imagine if Earth had no atmosphere. What would happen? Well, you have the sun, which is…
Founders of Science Exchange, Goldbely, and The Flex Company Discuss Fundraising
Hi! I’m Cat, and I’m really excited to introduce you to three YC alumni founders. This is actually going to dovetail really nicely with what Christy and Aileen were just talking about because we’re going to be talking a little bit about fundraising. We al…