[hetspookjee]

I think it’s the tragedy of public traded companies that eventually there’ll be such an overwhelming demand from the shareholders -given that they often hold a majority combined to just the directors- to monetise and provide dividend and/or a raising share, that they must go below the belt with tactics, like letting go of the initial core values.

If they do not do so, odds are big - but no given - that a competitor with a enormous bag of VC money might enter the scene and subsidise the losses like any other platform gameplayer does these days, that might undercut the incumbent in quality and slowly but surely garner enough market share to start flipping the coin, and the process either resets itself or doesn’t.

One must be constantly on top of the game to remain at the top, being handicapped by fickle things like principal values and the like.

I wish there was a combination of ngo and corp that focussed on solving the problem with the aim to dissolve oneself when the problem is gone, instead of becoming the problem.

[dx034]

Not all public companies panic if they don't grow fast over time. But other industries are also harder to penetrate by startups. But I wouldn't blame stock markets for this obsession, especially as companies already show this pre-IPO.

[bluSCALE4]

Look at what happened to DocuSign. They provide an amazing service, great growth yet stockholders decided to completely shit on it. Then the CEO apologizes and says they missed the mark by not growing out their business the right way. IMO, they did a great job and provided a valuable service. Yet shareholder are completely forcing them to react and do things they really had no interest in pursuing.

[cheriot]

It was priced at 30x sales! Now it's back to 10x sales... which is a slightly higher multiple than before the pandemic.

For context, here's the p/s of the S&P 500 https://www.multpl.com/s-p-500-price-to-sales

DocuSign's management chose to lose money in pursuit of growth. Then the growth stopped and they were just losing money.

[usrusr]

"The tragedy of publicly traded companies" sounds like a very useful term! But I don't think that you need to look any deeper than the basic market mechanism of shareholders with realistic expectations happily selling to future shareholders with higher expectations (e.g. unrealistic expectations). If the latter exist, they will offer more than the former think the shares are worth, deal. It's a market mechanism as basic as gravity, "race to the least pessimistic".

The only thing that sometimes prevents it is when holders are emotionally attached (old family stock or brand fandom) or when holders have a strategic need to prevent certain control scenarios (often nationally flavored).