Replies to post #13804 on VirTra Inc (VTSI)

[Paul P]

lost, re diversification:

You know, I try all time to use the Socratic method to teaching, and it never seems to work on message boards. I'll take a crack at it myself.



[discussion is taking place about a pizza press release]

Man: "Maybe they did it show diversification."

Paul: "And to whom is diversification of interest?"

Man: "To investors."

Paul: "What about customers?"

Man: "They generally prefer a company who is totally focused on their industry."

Paul: "I see. So a company who issues a press release in order to show diversification is trying to make an impression on whom?"

Man: "Clearly, investors."

Paul: "I see. And you say that customers prefer a different message, one of specialization?"

Man: "I do."

Paul: "So what is the cost of trying to impress investors with diversification?"

Man: "It must surely be that the cost is that you are alienating potential customers."

Paul: "I see. And when would the benefit be greater than the cost?"

Man: "Only when the investor is more valuable than the customer."

Paul: "And when would this be the case?"

Man: "When it is more valuable to sell shares than to sell products."

Paul: "I see."