this post was submitted on 26 Sep 2023
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Plenty of people understand it, and some of them understand that profit is so malleable that it’s not really a useful measure of a company’s financial health. What really matters is how much they make over their essential production operational expenses. They can tailor their non essential expenses to seem as profitable or unprofitable as they want and use stock valuation tricks like buybacks to make money for shareholders regardless.
What does it matter if the company is profitable or unprofitable on paper when certain people can make lots of money off it either way? Twitter was “unprofitable” it’s entire life but somehow I bet the executives still got their bonuses, I doubt the shareholders were dissatisfied with their stock valuations or the buybacks, and it sure didn’t stop them from acquiring other companies.
Thank you for putting this more eloquently than I could. I must admit, I was losing my cool with people being irrational about this.
I don't know if people are ignoring expense scaling and stock buybacks or purposely choosing to hide it.