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<blockquote data-quote="Jer" data-source="post: 8598934" data-attributes="member: 19857">I don't blame you for believing this - because up until a few years ago I also thought it was true - but that's not really the case.&nbsp; The doctrine of &quot;maximizing shareholder value&quot; isn't really codified into law that way - corporations are required to act in the long term interests of the shareholders but they aren't required to act in such a way that benefits short term gains via stock price shennanians - especially not when those shennanigans damage the long term health of the corporation.Why do we all believe that's the case?&nbsp; Mostly because there are a lot of people who woud like it to be the case and they benefit if we believe it to be true. Upper managment types can use &quot;maximizing shareholder value&quot; to excuse whatever harmful or even anti-social behavior they want to engage in.&nbsp; Investment types make their money by selling stocks, so they want it to be true that the entire economic system caters to them and their needs.&nbsp; And so on.Even if you think about it for a bit it doesn't really make sense that it would be codified in the law that way - the idea that the law should cater to the needs of the people who are selling their ownership stake should take precendence over the needs of the people who are keeping their ownership stake is silly if you think about it.&nbsp; If you're going to protect someone's interests shouldn't it be the folks who are actually keeping a stake in the company, not the ones looking to sell it off?&nbsp; (This is also why the &quot;activist investors&quot; will always couch their arguments in how it impacts the long term health of the company - because they know that's how it actually works and the argument &quot;I want this so stonks go up and I can sell&quot; would be laughed out of the shareholder meetings).Here's an interesting discussion about the idea - where it originated and where it went wrong - in the context of major business figures starting to talk about abandoning the idea a few years ago (uber capitalist Jack Welch called it &quot;The Dumbest Idea in the World&quot; over a decade ago, so this is a discussion in the corporate world that's been going on for a while): <a href="https://www.forbes.com/sites/stevedenning/2019/08/19/why-maximizing-shareholder-value-is-finally-dying/?sh=438df4066746" target="_blank">Why Maximizing Shareholder Value Is Finally Dying</a></blockquote>

[QUOTE="Jer, post: 8598934, member: 19857"] I don't blame you for believing this - because up until a few years ago I also thought it was true - but that's not really the case. The doctrine of "maximizing shareholder value" isn't really codified into law that way - corporations are required to act in the [I]long term interests [/I]of the shareholders but they aren't required to act in such a way that benefits short term gains via stock price shennanians - especially not when those shennanigans damage the long term health of the corporation. Why do we all believe that's the case? Mostly because there are a lot of people who woud like it to be the case and they benefit if we believe it to be true. Upper managment types can use "maximizing shareholder value" to excuse whatever harmful or even anti-social behavior they want to engage in. Investment types make their money by selling stocks, so they want it to be true that the entire economic system caters to them and their needs. And so on. Even if you think about it for a bit it doesn't really make sense that it would be codified in the law that way - the idea that the law should cater to the needs of the people who are [I]selling their ownership stake [/I]should take precendence over the needs of the people who are keeping their ownership stake is silly if you think about it. If you're going to protect someone's interests shouldn't it be the folks who are actually keeping a stake in the company, not the ones looking to sell it off? (This is also why the "activist investors" will always couch their arguments in how it impacts the long term health of the company - because they know that's how it actually works and the argument "I want this so stonks go up and I can sell" would be laughed out of the shareholder meetings). Here's an interesting discussion about the idea - where it originated and where it went wrong - in the context of major business figures starting to talk about abandoning the idea a few years ago (uber capitalist Jack Welch called it "The Dumbest Idea in the World" over a decade ago, so this is a discussion in the corporate world that's been going on for a while): [URL="https://www.forbes.com/sites/stevedenning/2019/08/19/why-maximizing-shareholder-value-is-finally-dying/?sh=438df4066746"]Why Maximizing Shareholder Value Is Finally Dying[/URL] [/QUOTE]

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