This is why we are at such a competitive disadvantage in the corporate world compared to the service sector.
When it comes to the internet and the online economy, the corporate sector is the place we see the clearest proof of the power of the invisible hand. We don’t see this power as a result of a central bank, a central planning agency, or even a huge corporation. This power comes from the fact that the internet is decentralized and the companies who make the internet are so far removed from the top of the hierarchy that they are invisible to the masses.
So we can have a company that makes an incredible product that generates tons of income for the company, but we cant know who is behind it, what the company is, or whether or not there is a government-backed corporation behind it. It doesn’t add up.
The problem is because we can never know the real ownership of things like these, its just as easy to make this stuff up as to not know for sure. The reality is, however, that the people who run our country are constantly hiding behind corporations, and it can be hard to know who the real owners are.
For example, think about how many of the world’s largest corporations are located in our own country. Most of them have a lot of shareholders, and their owners can change at any time.
Most of the stockholders are made up of just one person and the CEO is a man named John Henry. That’s right. John Henry. Because John Henry is a man, he doesn’t actually own the company. He uses the stock as leverage to get what he wants, usually, but not always.
John Henry is the CEO of a company called SBC Holdings. SBC is a real company with a few real employees. It has a stock price of about $10 per share. It has a market capitalization of about $100 billion, which is a lot of money, but not a lot of shareholders. SBC Holdings has a board of directors consisting of the CEO, the chairman of the board, and six other directors.
The company’s stock is issued at a discount to par value. The company’s shares are not listed on any stock exchange. If you bought stock through an IPO in the last ten years, you may have bought your shares before the company went public.
So what does this mean for the companies prospects? Well, if the stock is worth 10 per share, it means that you have 10 shares to sell. 10 shares at 10 per share means that you have more chance to make a profit. However, if the shares are worth 10.5 per share, now you have a chance to make a profit of about 2.5 times your initial investment.
This is obviously a really bad deal for the company because it means that after you sold your stock, you have nothing to sell. In reality, you likely could still sell the shares. But if you’re already on the hook for the costs of your IPO, then it’s a bad deal on the long run.