Nokia set plans to cut its workforce by up to 14,000 as it reported a steep drop in third-quarter profit. The telecom equipment maker said it’s looking to...
Remember, this isn’t because they’re at record losses, or that they’re breaking even.
It’s literally because they’re not making enough profit.
This is the freemarket system functioning as intended.
A company can still be making money, still be above water, but decide their shareholders need to be even better off and they will decide they deserve money more than people struggling and making it by barely check-to-check.
Not quite. Ultimately it’s the shareholders making this decision. They twist arms on the board of directors, who in turn twists on the CEO. If the CEO doesn’t make a call like this, they simply fire him and find someone who will.
And it’s not necessarily that the shareholders want more money. But they sure as hell don’t want to lose money. And they are ATM.
NOKIA
-6.44%
NOK
-5.16%
ERIC.B
-0.80%
Hell, I might be one of those shareholders. Maybe there’s a spot of Nokia stock in my Roth IRA, hell if I know. But the people managing my IRA know, and they’ll drop Nokia if it keeps losing value. And if Nokia keeps losing value, they won’t make payroll, those people are getting fired anyway.
If they were a private firm, there wouldn’t be any of this horse shit, but then they couldn’t raise capital to expand, take on a major initiative, etc. Sucks either way doesn’t it?
Remember, this isn’t because they’re at record losses, or that they’re breaking even.
It’s literally because they’re not making enough profit.
This is the freemarket system functioning as intended.
A company can still be making money, still be above water, but decide their shareholders need to be even better off and they will decide they deserve money more than people struggling and making it by barely check-to-check.
Not quite. Ultimately it’s the shareholders making this decision. They twist arms on the board of directors, who in turn twists on the CEO. If the CEO doesn’t make a call like this, they simply fire him and find someone who will.
And it’s not necessarily that the shareholders want more money. But they sure as hell don’t want to lose money. And they are ATM.
Hell, I might be one of those shareholders. Maybe there’s a spot of Nokia stock in my Roth IRA, hell if I know. But the people managing my IRA know, and they’ll drop Nokia if it keeps losing value. And if Nokia keeps losing value, they won’t make payroll, those people are getting fired anyway.
If they were a private firm, there wouldn’t be any of this horse shit, but then they couldn’t raise capital to expand, take on a major initiative, etc. Sucks either way doesn’t it?
IIUC, profit doesn’t include obligations to investors.