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Companies Have Given Up On Being Profitable | Logically Answered


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Companies Have Given Up On Being Profitable

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Net profit is virtually useless for modern companies as it doesn’t benefit founders, shareholders, or employees. This might sound a bit counterintuitive, but it’s the case with basically every tech company and startup. Even more legacy companies like Disney are starting to adopt this mindset when it comes to new products. The only thing that these companies actually care about is revenue growth and user growth. As long as these two aspects are growing rapidly, the stock of the company also skyrockets. Historically, this would only benefit founders and shareholders, but in recent times, employees are given larger stock awards than ever, especially in tech. Most tech employees nowadays actually care more about stock compensation than cash compensation. They simply want a comfortable cash wage and everything else to be paid in stock. This creates this unique situation where the company making net profit is basically useless. This video explains how the importance of corporate profitability went down the drain and why modern companies don’t care about profit.

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Timestamps:

0:00Money Losing Giants
3:01Founders Succumb
6:59Shareholders Succumb
11:02Employees Succumb
13:10Modern Companies

Resources:

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Disclaimer:

This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.
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Logically Answered is centered around explaining the economics of tech and social media. These sectors are generally analyzed through the lenses of finance and economics to determine which industries and companies will thrive and which will fall. In addition to this analysis, the content is often focused on the stories of various famous entrepreneurs such as Elon Musk, Steve Jobs, and Jeff Bezos. Logically Answered also cover the rise and fall of several interesting companies and services that we come across on a daytoday basis. There have been so many companies that have risen to fame and then died out in a single generation. The most interesting companies are the ones that were able to save themselves and avoid bankruptcy. Feel free to follow the podcast if you would like to see any of these topics Logically Answered.
Find Logically Answered on YouTube: https://www.youtube.com/@LogicallyAnswered/
Disclaimer: This podcast is an independently created audio adaptation of content originally published by Logically Answered. This is a fan made podcast that appreciates the channel’s insightful approach to knowledge and aims to make it accessible to those who prefer listening over watching. This podcast is not affiliated with, endorsed by, or officially connected to Logically Answered in any way. All rights to the original content belong to Logically Answered. If you have any concerns, please reach out.
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