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Re: Who cares?
The problem is that investors aren't interested in the long term. What they want is immediate stock appreciation, and you don't get that by building infrastructure that will need to be paid off.
It's indicative of our society, unfortunately. Look at the commercials pitching home equity loans. Most often, they say that you can use that money for something like the vacation of a lifetime or to "cash out" some equity. Why the hell would I want to do that? Sure, if I had an emergency that I needed to address and didn't have the money to do, I wouldn't have a choice, but there's no way I'm going into debt just so I can take a vacation or put some more cash in the bank. The same holds for the ads you see from J. G. Wentworth. Again, why would I want to sell a long-term settlement or annuity for far less than it's worth just to get the money now? Granted, if I really need it now, that's one thing, but otherwise it's a short-sighted, foolish move.
However, many investors don't think like that. They want the cash now; long term health of the company be damned.
Very true. Same for financing credit cards, 0-down car loans, etc, etc. It's unfortunate, however, that the executives who are paid the big bucks to manage a massive company are acting like irresponsible consumers who don't know how to think in the long term.
It is unfortunate. However, in a way, I can understand it. If management embarks on a strategy that investors don't like, they'll either sell their stock, or, if there are enough big ones who are angry enough, they'll yell to the board of directors. In either case, the board is going to come down hard on management and demand that it reverse course. Any exec who is brave or foolish enough to defy orders like that is going to be shown the door.
And you can't even count on the board to have the company's best interests at heart. Look at what Carl Icahn wanted to do to Yahoo. His whole plan was to pack the board with his cronies, and these people would vote to sell out to Microsoft.
I think that, if the proverbial goose that laid golden eggs was a company, the folks who owned it wouldn't care for it and allow it to lay those eggs in its own time. No, they'd do everything they could to make it lay them as fast as possible, knowing full well that the measures they took would eventually kill it.