Learning2vest, you question is intriguing
One hundred percent(100%) of the commercial success, earning power, and sustained revenue growth necessary to create value appreciation in a publicly traded company is created by;
A) The management, employees, and business partners of the company.
B) Speculative investors who buy shares in the company.
Posing the question that way makes me wonder why you invest in the stock market - it seems you don't have much respect for the investing public.
Are you saying that speculative investors who buy shares are greedy pigs living of the sweat of others and should be grateful for whatever they get?
Do you feel those investors are really just leeches and worthy of contempt of the income generators?
The purpose of the secondary market is to allow for capital creation. If there was not a liquid, viable market for people to sell into, capital would not flow into new businesses because even if they succeed, lack of liquidity would force them to sell at low prices or keep their capital tied up longer as they searched for a buyer. Therefore, neither answer you propose is correct, because without the capital contributed originally there would be zero value. Also, without a secondary market the value creation would be difficult to cash out – workers could get there share of the earning (of course, they’d also have to pony up their share of any losses), but can you imagine trying to sell .000013% of a business to someone. The legal fees alone would kill most sales.
There is a philosophy that ties out with your "A" answer, where profits are seen as the result of the exploitation of the workers who create the wealth. That again ignores the investment of capital and risk taking. It has been tried many places over the last century and widely believed to be found inferior as an economic system, not to mention the political problems it creates.
Buying stock makes me a partial owner of the company. It does not give me the right to tell management how to handle day to day operations, but it does give me the right to vote on certain issues and stock grants are one of them. To simply leave that decision to management is a failure of your responsibility to yourself. It’s one thing to look at the option proposal and deem it fair and reasonable, but to simply kowtow to managements wishes regarding their ability to pay themselves is foolish. I hope management does not adopt the same philosophy with the other employees. Otherwise, they can all just request a raise whenever the company is doing well, and management would just rubber stamp it yes because without the workers, where would they be?
Reasonableness.
Proportion.
Justification.
Fairness.
That’s what I’m concerned about.
AI
