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CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2
reply to openbox9

Re: 9;

said by openbox9:

The role of shareholders is more akin to that of the company, not a bank. Shareholders are owners and as such are entitled to the profits of the company. If you owned 1/4 of a business, wouldn't you expect to be compensated...at least a little? As I've stated many times, there is a balance between distributing profits to owners and reinvesting those earnings in the company for potential growth.

I certainly understand that the mechanism is different... yes, shareholders are considered owners of the company to the extent of the number of shares they own, but there is little (to no) effective difference between shareholders and a bank (unless you suggest they provide something other than funding). I would submit that a 1/4 owner of a business is there because he/she brought something to the table other than just funding. It is possible that there are there just for funding (and playing the exact role of a bank) but that begs the question... do they somehow deserve to have their profits maximized at the expense of the business model conceived by the other three? To answer your question (even though you side-stepped mine ) YES, as 1/4 owner, I would expect to be compensated with 1/4 the profits of the business. But I would also understand that I was there because I believed in the ability of the other three to make me profits using their business model and not try to modify it... otherwise, why would I have invested in the first place? People who contemplate this line of thinking will start to realize the true nature of Wall St.

While I see a great deal of imbalance in today's world, you HAVE stated many times the need for balance and I appreciate that... I do not see you as unreasonable and I enjoy the dialog.

openbox9
Premium
join:2004-01-26
Germany
kudos:2

If you must link investors to a bank, then I'll grant you that the debt holders are most like banks. Equity owners are not.

said by CXM_Splicer:

I would submit that a 1/4 owner of a business is there because he/she brought something to the table other than just funding.

And I would submit, from personal experience, that owners/investors don't have to play an active role and can indeed simply provide a line of funding to make a business work. Think silent investor.
said by CXM_Splicer:

do they somehow deserve to have their profits maximized at the expense of the business model conceived by the other three?

Once again, balance.
said by CXM_Splicer:

While I see a great deal of imbalance in today's world, you HAVE stated many times the need for balance and I appreciate that... I do not see you as unreasonable and I enjoy the dialog.

Thank you. Likewise to you good Sir.
said by CXM_Splicer:

To answer your question (even though you side-stepped mine )

I didn't sidestep your question considering I don't view equity owners as banks. The debt holders on the other hand, no, I would not expect them to receive their coupons beyond when their bonds mature, nor do they receive such payments.