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What's a scam that's so normalized that we don't even realize it's a scam anymore? (lemm.ee)
submitted 3 years ago by to c/asklemmy@lemmy.ml
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[–] 306 points 3 years ago (16 children)

The stock market and publicly traded companies. The idea that a business that is making consistent profits isn't good unless those profits are increased each quarter is asinine. This system of shortsighted hyper focus on short term quarterly growth for the sake of growth is the cause of so much pain and suffering in the world. Even companies with amazing financials will work to push workers compensation down, cut corners and exploit loopholes to make sure their profits are always growing. Consistent large profits aren't good enough.

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  • [–] 65 points 3 years ago (2 children)

    Instapot. Instapot made too good of a product, most people buy one and its good for years. That's good for consumers but terrible for investors. The company that bought them out and took them public saddled them with a ton of debt from other sectors and now they're bankrupt.

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  • [–] 17 points 3 years ago

    Diamond Sports is suing Sinclair for doing the same, minus the "good product" part.

    Sinclair bought up the Fox RSNs a few years back, renaming the company as Diamond Sports and the channels as Bally Sports. Not too long afterwards, they went bankrupt. Diamond is claiming that Sinclair has saddled them with massive debts and extraordinarily high management fees. Sinclair also kept the funds from the sponsorship agreement with Bally.

    https://www.baltimoresun.com/business/bs-bz-sinclair-broadcast-sued-by-diamond-sports-20230722-ndvdj6btfreovbsyo7gk7eeony-story.html

    The lawsuit accuses Sinclair of receiving about $1.5 billion as a result of alleged misconduct, including fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties.

    “Diamond Sports Group is seeking to vindicate its rights and protect the value of the Diamond bankruptcy estate, including by recovering value from Sinclair Broadcast Group that was improperly transferred from Diamond prior to its filing for bankruptcy in March 2023,” a spokesperson for Diamond said in a statement.

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  • [+] 15 points 3 years ago* (last edited 2 years ago) (6 children)
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  • [–] 5 points 3 years ago (5 children)

    Wait what?

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  • [–] 7 points 3 years ago* (3 children)

    Google's shares are divided into two types, Class A and Class C. Class A shares, traded as GOOGL, confer one vote per share as a typical stock would. Class C shares, traded as GOOG, confers no voting privileges. This dual shares system was done to raise more money selling less useful Class C shares (intended for mutual funds and the like) while keeping control of the company in the hands of those held on to Class A shares (i.e. longtime executives).

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  • [–] 3 points 3 years ago*

    They have 2 (3?) types of shares, and the one most people buy ($GOOG) is a class C share which comes with no voting rights and doesn’t give you a share of the company profits.

    While class A shares ($GOOGL) come with voting rights, class B shares which are held by Google’s founders and insiders get 10x voting power and so they still hold the majority vote. Class A also does not pay dividends.

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  • [+] 6 points 3 years ago* (last edited 3 years ago) (2 children)
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  • [+] -11 points 3 years ago (1 child)

    If you invest in the stock market and expect companies to be making large profits all the time then you're going to be very disappointed. That's not how it works. There are financial reports, market regulators, analysts. History tells us that awful companies with shady practices would always get caught in the end, no matter how big they are.

    Everyone should invest, but investors should always do their research.

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