An important and surprising insight of modern finance is that shareholders are, at least indirectly,1 people too. There is a standard view of corporate finance that says shareholders own shares in the firm, and the firm has fiduciary duties to those shareholders, and the way for the firm to fulfill those fiduciary duties is to make the stock price go up. The only thing that we know with certainty about the shareholders is that they own shares, and they’d rather have the shares be worth more than worth less, so the best thing to do for them is to make the shares worth more.

But in modern finance we know, or suspect, a few more facts about shareholders, and those facts might suggest that the shareholders have other desires, beyond just the stock going up. For instance:

QOSHE - Shareholders Are People, Too - Matt Levine
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Shareholders Are People, Too

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22.01.2024

An important and surprising insight of modern finance is that shareholders are, at least indirectly,1 people too. There is a standard view of corporate finance that says shareholders........

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