[TuringNYC]

Unprofitable can be good or bad or unknown:

Bad: they dont have product market fit and cannot price at a level that is profitable

Unknown: they do have product market fit and can likely price at a level that is profitable, but choose to underprice to capture market share and grow

Good: They are actually profitable but are re-investing all their profits into internal investment to become even more profitable in the future. example: Amazon for the last 20yrs

[coldcode]

But by definition if you invest profits forever you never make any; maybe if you wait long enough you own the entire market and can charge whatever you like then. Is that really actionable though? One stumble and your stock is almost worthless.

[cj]

If you stop reinvesting profits into R&D, the only other place to put your profit is paying out dividends to shareholders or doing things like buying back stock (which many companies start doing once they reach a point where shareholders will realize more value through dividends than they will from ROI on R&D).

[TuringNYC]

It is a choice nevertheless. As a business owner, you have the freedom to go this route. As a public company, you also have the freedom to go this route as long as the board/shareholders agree (as they did in Amazon's case.)

If a business owner wants to re-invest for growth and shareholders agree I do not see an issue. Without that, we would never have Amazon, FB, MSFT, or almost any large company (whatever you think of these companies aside)

As an Engineer, I think re-investment is awesome. Compare this to the old mentality of squeezing a company until it has no blood left (as Private Equity companies often do.) As long as the company is profitable and re-investing, this is a huge net value to society IMHO.