The Chip Gaines Problem
-
Is vertical integration good or bad?
-
In capitalism, companies (especially public companies) have to growth. You can grow horizontal or grow vertical. But that is what companies will try and do.
-
@taiwan_girl said in The Chip Gaines Problem:
@Horace @Jolly I agree with you both. But with public company, there is almost a "mandatory requirement" to grow.
Small private companies have a lot more flexibility on to grow or not.
The first two words of your post was "in capitalism", but you really meant "in publicly traded companies". It's an important distinction.
-
@taiwan_girl said in The Chip Gaines Problem:
@Horace @Jolly I agree with you both. But with public company, there is almost a "mandatory requirement" to grow.
Small private companies have a lot more flexibility on to grow or not.
The first two words of your post was "in capitalism", but you really meant "in publicly traded companies". It's an important distinction.
@Horace Interesting thought, but I do not 100% agree. For example, there are public traded companies that have a (large) majority government ownership (like some in China - for example Sinopec). They do not have the same pressure to grow year to year as a pure public company.
-
If the government owns part of the company, is it truly a private company?
“Cry havoc and let slip the DOGE of war!”
Those who cheered as J-6 American prisoners were locked in solitary for 18 months without trial, now suddenly fight tooth and nail for foreign terrorists’ "due process". — Buck Sexton
-
@Horace Interesting thought, but I do not 100% agree. For example, there are public traded companies that have a (large) majority government ownership (like some in China - for example Sinopec). They do not have the same pressure to grow year to year as a pure public company.
@taiwan_girl said in The Chip Gaines Problem:
@Horace Interesting thought, but I do not 100% agree. For example, there are public traded companies that have a (large) majority government ownership (like some in China - for example Sinopec). They do not have the same pressure to grow year to year as a pure public company.
The reason publicly traded companies “need to grow” as you put it is that the cost of their shares has an expectation of growth built into it. If that expectation does not exist, then the shares will be priced accordingly. In fact the need to grow is only a “need” to the extent that the stock price going up is a need. There isn’t any such need in fact, as long as the stock pays a dividend appropriate to the share price. Some mature companies operate like that. Stable stock price and nice dividend. An expectation of growth doesn’t need to be built into the stock price.
-
@Jolly said in The Chip Gaines Problem:
If the government owns part of the company, is it truly a private company?
Hmm tough question. I think of a private company is one that no-one can own any part of it except by "invitation". But if someone "invited" the government to have 10% of it, ......
Dont know.
@horace Thanks for the info. Makes sense.
