[compiskey]

I mean it’s the Walmart model; be cheap early, get less cheap over time.

My 5,000 foot philosophical take is because they were never making money in a day to day business way and relying on low interest rates to inflate values through money shuffling schemes to game attention.

Over time models made it apparent they would never make long term business sense as software improved and automation took over, so it’s a medium term pump and dump jobs program fueled by low interest rates to attract information workers into providing them code shapes to train AI that writes code and let big tech own all the copyrights.

So we’ll have MPAA/RIAA owning all art, and FAANG or whatever owning all technology. A modern patronage system kind of sort of.

Not saying it’s good or bad. Just an attempt at a meta viewpoint of society.

[boole1854]

Is that the "Walmart model"? Out of curiosity, I just checked their financial statements. For FY 2022, they had a gross profit margin of 25.1%. In comparison, for FY 1986 (the oldest year I have easy access to), they had a gross profit margin of 25.9%. That hardly seems to fit the pattern.

[ncallaway]

WalMart wasn’t doing it globally, they were doing it regionally or even city by city.

So, a store would open in a new city with very cheap prices. That individual store might be running at break even, or even at a loss. Once the various other local competitors have been driven out of business, they start to raise the prices, and become more profitable.

When competitors start coming back to town, they lower their prices and repeat.

Different individual stores would be in different stages of this at any time, so you wouldn’t really see the strategy by comparing various profit margins from different years, unless they were changing the rate at which they were in the expand phase.

[compiskey]

It used to cost X to run corp A, now it costs Y, where Y is Z times higher than X.

Millions to billions in this case.

Don’t forget to add in the cost of social programs their employees rely on given the abysmal pay in order to keep your numbers down.