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Does enshitification happen because companies are publicly-traded? (beehaw.org)

submitted 4 months ago by [email protected] to c/[email protected]

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Isn't that a prerequisite for enshitification? Publicly-traded companies are required (by law, I think) to maximize profits for their shareholders, even if that means utterly ruining their original product (Reddit, Boeing, etc.), yes? What do you think?

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[–] [email protected] 26 points 4 months ago (1 children)

Publicly-traded companies are required (by law, I think) to maximize profits for their shareholders,

The is not true, stop spreading misinformation

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits

[–] [email protected] 6 points 4 months ago (2 children)

They may not have to maximise profits but the shareholders will question every decision that doesn't maximise profits so the result is the same. That's why activist investors that push companies to more ethical behaviour are important.

[–] [email protected] 3 points 4 months ago* (last edited 4 months ago)

They may not have to maximise profits but the shareholders will question every decision that doesn't maximise profits so the result is the same.

If that were true, we wouldn't see the obscene salaries of C-suite level execs skyrocket... That money cuts into the profits as well, you know?

They are ok squeezing their workers while giving themselves the sweet life on the company's dime

That's why activist investors that push companies to more ethical behaviour are important.

This is a fairy tale force, like Santa or the boogie man. You'll never get ethical behavior from profit seeking entities

[–] [email protected] 2 points 4 months ago

Yeah, but we’ve had countless examples of loss-making tech companies with sky-high valuations. Amazon didn’t make a profit for something like 20 years. Investors of course want returns, but they can differ on the timeframe they’re willing to wait for them.