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by lelanthran1 days ago |
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upvoteby Orygin1 days ago|
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Oh yeah I forgot 5 BILLION dollar in revenue is a signal that the market does not want your product
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upvoteby lelanthran1 days ago|
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> Oh yeah I forgot 5 BILLION dollar in revenue is a signal that the market does not want your product

Doesn't matter how big the revenue is if the market is not interested at the price you are selling.

I mean, by your logic, if I sell a dollar for 64c, and do $5b revenue, that's an indication that the market does indeed want the product, but not an indication that the market wants the product at the price you need to sell at to stay in business.

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upvoteby nayroclade1 days ago|
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They are not selling at a loss though. The real issue here is that businesses such as Microsoft do not exist to serve a market or make enough money to survive and pay their employees. They exist to increase the value of their owner's shares. This is predicated on an unsustainable model of continual growth, with the expectation that every market they operate in can produce high margins and endless expansion. But demand is not infinite and persistent high margins are the exception, not the norm.
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upvoteby bluGill1 days ago|
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Maybe it isn't a loss, but as an investor (never directly in them), I consider 3% profit margin a bad sign - at that return I'd prefer a savings account: FDIC insurance means that after accounting for risks the savings account is better. I know stock returns don't directly track profit margin, but that is one input into the complex consideration of stocks.
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upvoteby vouwfietsman1 days ago|
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You are right, and this is why not everything should be a stock. Whatever they will cut to avoid emitting "a bad sign", may involve:

* firing people * making services worse * sacrificing their own future

Whether it actually does involve those things is effectively arbitrary, because the consideration of the "bad sign" is also arbitrary. If there is no objective value judgement of their operation there is no objective value judgement in their streamlining either, so all bets are off.

no percentage no good

"complex consideration"

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upvoteby pfdietz1 days ago|
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Overall they are not selling at a loss, but parts of what they're selling are being sold at a loss. The market is telling them to slim the f- down and get rid of those money-losing parts.

This is all normal and justifiable. Where is the logic that corporations need to preserve dysfunctional parts of their operations?

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upvoteby tfigueroa1 days ago|
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Corporations don’t need to, no. But they are systems, and it’s a beginner mistake to assume changing one part is going to affect the whole in some simple, predictable, logical way.
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upvoteby pfdietz1 days ago|
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That sounds like an extremely lame excuse to preserve money losing activities.

I'll counter by saying that pruning off failing things is not only good, it's the core of capitalism. Creative destruction, as Schumpeter called it. You get efficiency by hunting down and eliminating inefficiency, redeploying the resources elsewhere.

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upvoteby vouwfietsman1 days ago|
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> pruning off failing things is not only good, it's the core of capitalism

It's quite serious that you see "being good" as something inferior to "the core of capitalism".

Also, the core of capitalism is making money for private individuals, nothing more, nothing less. Whether that's done with or without "failing things", is really beside the point.

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upvoteby jayers1 days ago|
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The core of capitalism is about where ownership of capital (value producing assets) resides, that is, by private individuals.

What private individuals choose to do with their capital, chase infinite growth and profit or sit on it, is up to them. This is as opposed to say, state ownership of capital.

People confuse the stock market with capitalism. You don't need a stock market for capitalism to function. Publicly traded companies in the United States are legally bound to maximize profit (Dodge vs. Ford Motor Co.)

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upvoteby xerox13ster1 days ago|
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> You get efficiency by hunting down and eliminating inefficiency, redeploying the resources elsewhere

Plants do this. What’s it got to do with capitalism?

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upvoteby pfdietz1 days ago|
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Error is rampant. I saw a quote saying the difference between a good business and bad one is the good one makes the right decision 60% of time, the bad one 40% of the time.

So errors abound, and have to be subsequently corrected. This correction process is as natural to capitalism as breathing is to you being alive. Without it, things would rapidly grind to a halt. We see this in sclerotic centrally planned economies where errors persist for much longer.

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upvoteby tommit1 days ago|
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No? By that logic you sell a dollar for 103c and that's not enough to quench your greed.

Obviously both statements are gross oversimplifications. But I could not help myself and let that slide just like that.

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upvoteby moron4hire1 days ago|
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Just to add to your comment, people do sell dollars for $1.07, they are called mortgages. I've heard it's a pretty big business.
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upvoteby jstummbillig1 days ago|
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What they do is they sell a dollar for 1.07$ future dollars (and, realistically, less than that because of defaults but whatever).
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upvoteby tialaramex1 days ago|
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It's a lot more than $1.07 future money, a mortgage is more like $2 or these days $5

If you're offering even 25 year 75% LTV mortgages at such a low interest rate it's $1.07 future money you're going bankrupt. And these days people are taking 30 year, 95% LTV or even asking for 40 year 100% LTV which is fully batshit.

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upvoteby KyleTheDev1 days ago|
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Why is it that every person who tries to make these dumb arguments in favor of destructive capitalistic greed always attempts to make it look like the multi-billion dollar profitable business is somehow self-sacrificing or a force of good? "If I sell a dollar for 64 cents!", yea, as if that's even close to what's happening.
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upvoteby Ferret74461 days ago|
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If capitalistic greed is so destructive than why are you living in the most successful and highest quality of life society in history? You can find a cave somewhere to camp in if you want, or go to North Korea, etc.
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upvoteby KyleTheDev6 hours ago|
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I'm sadly not living in one of the very nice-to-live Nordic countries.

This level of greed is also relatively new, and was pretty well managed by previous (30~ years ago?) administrations. There's an obvious direct correlation between the rapid growth in wealth of the top 1%, businesses becoming increasingly anti-consumer, degrading quality of life amongst the average person, etc. It isn't something inherent to capitalism, it's something inherent to unmanaged 'trickle down economics' capitalism and societies built on individualism above all else.

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upvoteby chii1 days ago|
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> No, it's a signal from the market that the product being sold is not wanted by the market.

to me, it is really a signal that the cost of production is high - ala, they're inefficient, rather than the market not wanting the product.

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upvoteby Tanoc1 days ago|
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The issue is both. They're inefficient in that they hire too many people to work on things people don't want. They collate all of their workforce and capital into projects that will perform poorly, rather than splitting that up between different projects that will individually vary but have a much healthier release and lifetime. The thing that people very high up in the organization lose a view on is that while there are operating costs to running multiple individual small projects, overall they balance themselves out because the risk isn't concentrated and each budget is an entity unto itself that doesn't affect the others. A supermassive failure like Concord however takes everyone's budgets and puts it into one giant project that has to succeed well beyond reasonable or even sustainable returns because now you have the costs of the core developers, the half dozen assistant studios, and the dozens to hundreds of asset producers on contract. And because of that you have to target as many demographics as possible, which for marketers means shaving off as many of the pieces that are necessary for complex mechanisms functioning within their niche but are incongruous with the other complex mechanisms that have been deemed as appealing. In other words, they're gambling their entire income on the equivalent of a spaceship boat plane car that can't land on water, can't re-enter the atmosphere, can't drive on the roads because it's too big, and is awful to fly because it's all of those other things.
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upvoteby piltdownman1 days ago|
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It ultimately depends on what sort of Skinnerbox you're running tbh.

Players purchased roughly $6.8 billion worth of the Roblox in-game currency Robux in 2025, a massive 55% year-over-year increase.

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