[s1artibartfast]

not sure which part you are confused by. The Key take aways are:

1) At a high level, shareholders are interested in stock price to earnings, not margin.

2) When you buy ford stock, none of that money goes to the company for capital investment. It goes to some other stock trader.

3) shareholders and CEOs want ROI. that investment is stock price, which detached from manufacturing capacity investments.

[hollerith]

>When you buy ford stock, none of that money goes to the company for capital investment

Companies regularly sell their own stock and use it for capital investment. It is an important way that large capital projects are funded in capitalistic countries.

Federal Express is a great example: as a start-up, it could not become profitable till it had a big network (planes, airport landing rights, a huge sorting facility) so the cost of the network had to be paid for by selling stock or by borrowing, and corporations at least in the US raise more money from stock sales than they do from borrowing.

Another example is training AI models: most of the tens of billions of dollars in GPUs and electricity that has been used or will soon be used to train AI models comes from the sale of stock.

[s1artibartfast]

You are talking about IPOs and other secondary stock offers.

During secondary stock offers, Investors will care about how much value the addition funds will create relative to cash put in.

Still, this is different than a percent profit margin on sales. Investors care about the total profit, not the percent margin.

going back to the actual situation, EV's lowering the percent profit margin doesnt matter as long as they are increating the total profit.

If you sell 1 million gas cars at 20% profit, and can sell 1 million EVs at 10% margin, you are still better off selling the EVs and taking the 15% margin on 2 million cars.

The idea that ford is dialing back production because it lowers their percent margin isnt a realistic justification. especially after the funds have been sunk in manufacturing.