this post was submitted on 17 Nov 2025
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me_irl
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If the company needs shareholders to fund it though, it is not economically viable in the first place. It is being artificially supported by the capital that they add to it
It's a bit more complicated than that. One way the shareholders support the company is that the company will hold sone percentage of its shares, which have a value as determined by the stock market. Amongst other things, the company can use those as colateral for loans which they may use to expand the company. The idea being that expansion will make the shares worth more, and increase income, so making the loans easier to pay off. Shareholders support the value of the shares by not selling them cheaply, This benefits the shareholders and the company, and if they think the company is doing well, they'll tend to trade the shares at a higher price. If they think the company isn't doing well, fir instance it's not increasing its valuation, they'll tend to trade at a lower price, further reducing the valuation, and making it harder for the company to raise funds through loans or share sales.
Basically the whole thing is held up by the common delusion that the share price is related to the performance of the company. It's actually only related because everyone agrees it is.
ok. so nobody should ever get loans then?
because that's what shareholding is. a loan.
Nah.. i don't see shareholding as a loan. Loans cost a set percentage rate. Shareholding costs parts of the company worth. Loans are imo totally legitimate. Shareholding on the other hand, is selling off the company to people who don't care if it survives or not. As long as they jump ship before it shows signs of sinking