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Comment by ThinkBeat | Hacker News Reader

I always find the constant expectation of growth puzzling. and that it is a regular occurrence.

For a long time, DELL grew and grew and got bigger. Then they plateaued (for a while) and the investors were mad.

There are only so many people in the world who want an FB account. and only so many companies and people who need a DELL computer.

Infinite high growth is impossible to sustain. Physically.

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Yes, but the stock market works on the premise of growth, they try to raise money by virtue of being on the stock market, in order get the money required to finance that growth.

I would think, that a company that has plateaued should take itself off the stock market, however this doesn't seem to be happening. Such a move would probably imply some drastic changes in how a company is goverend.

A company that does not grow can still share profits with the owners, so it makes sense also for not growing companies to stay on the stock market, so people can buy/sell these future profits.

This is not, and have never been, the case. Certain markets are winner-take-all, which necessitates a growth-oriented strategy regardless of the stock market. In the general case, the value of a stock only dips if the risk-adjusted net present value of expected future dividends changes for the worse. What happened here is that the market clearly expected the growth potential to be larger than what was the case, but absolutely not infinite.

Taking the company private means that you have to buy all outstanding shares. How are you going to come up with the money to do that? Valuation is usually around 20x earnings. If you do it through share buybacks, this process will take decades.

Pretty much the only way to do it is with an outside investor and in that case the company still doesn't "own itself".

When you have plateaued post-hypergrowth is not the time to get off the market, it's time to redistribute capital by massively repurchasing shares if you can't intelligently reinvest it all. Preferably after the market slams your ticker.

Not true at all. Look at Apple.

Growth means a share bought today will have a bigger value tomorrow.

Investors (people) expect a remuneration for their money. So, a public company can only survive with growth.

Growth and risk/reward balance is what keep companies alive.

This is true of Facebook and many other tech stocks, but that is because these companies have never paid dividends. Investors have put up with that because the expectation of higher future profits (and thus higher cash piles for dividends or stock buybacks). A shrinking company that has never paid a dividend is much less attractive from this point of view.

That's not true, public companies can survive on profits and their investors then enjoy dividends. The market just figured out that growth is more lucrative than dividends for specific people, and there is less incentive to make sustainable companies.

yeah but for a long time their stock price was built on the dream of growth. Of course you can have a publicly traded company with a steady business. A good board and leadership can keep it going.

Right now it feels like Wall street is realizing the growth party at Meta is ending. Now it's about figuring out how much, if at all, it's going to contract and what the real value of the business will be going forward.

Isn’t Dell famously a private company?

Dell went public in the 80's, was bought out by its founder in the early 10's, and then did a reverse merger with vmware to go public once again a few years later.

having investors does not mean you are a public company.

there are private investors, angels, VCs, etc.

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