= 27d567bc2d48d9f40e9ccc20ea370b15)
rpmcruz comments on Call for information, examples, case studies and analysis: votes and shareholder resolutions v.s. divestment for social and environmental outcomes - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
= f037147d6e6c911a85753b9abdedda8d){kind=logo}
Comments (33)
That is silly. What, not owning stock of company XYZ makes me a shareholder activist? Oh boy, I'm an activist in SO MUCH of global equity...
That's called "We lost. RETREAT!"
"What, not owning stock of company XYZ makes me a shareholder activist?"
I don't think that is the point at all. If a lot of people buy stocks from one firm and refrain from buying from their competitors, they change the relative costs of raising capital and do benefit one firm instead of the other. It is like a lot of customers buying from one firm and not from others.
You are very confused about how stock markets work.
You buy stock "from the firm" in two rather uncommon situations. The first is an IPO (Initial Public Offering) which is a once-in-a-lifetime event for a company. The second is what's called a "secondary offering" which exist but tend to be rare, in part because SEC makes it a big pain in the butt compliance-wise.
Normally when you buy stock in the stock market you buy it not from the firm, but from some other investor. The firm sees no money from that transaction and, generally speaking, doesn't care about the price at which it happens (yes, that's an approximation, but it's good enough for the level we're at here).
I know. But that discussion is largely irrelevant. Shareholders do care about the price of the stocks and dividends.
That is like saying that in my coffee shop I do not care about whether my customers enjoy their coffee. I already sold them the coffee afterall.
The point is that if you don't care about your shareholders and shootcrap your company, your competitors will find it much easier to raise capital. The original question is whether there are enough "activists" that can change the route of a company by selling their stocks or buying from expensive stock options from their companies.
This is also like saying that in order to harm the coffee shop you will attack the customers. Attempts to punish the company by inflicting pain on the shareholders are unlikely to make you popular with those shareholders.
Citation needed. Can I see some empirical data where activists' efforts at divestment actually, in real life, led to the rise in the cost of capital for a company?