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Comment by capableweb | Hacker News Reader

Spotify is a public for-profit company with shareholders, the purpose of their organization is not to make profit so they can redistribute it, but to increase the share value as much as possible in order for the shareholders to benefit. Sometimes that means that they need to increase profits, but not always, there are other ways to increase the share value besides profits.

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Such as?

Reducing operation costs (labor), selling valuable assets are two that immediately come to mind.

Both of those result in increasing profits.

My bad, I misread what the person you were replying to asked.

"Hype" is a common way for "modern" companies to drive up share price, see TSLA for a good example of that. Greenwashing is another, not as common approach.

Look at Tesla’s net income:

https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc...

That is not hype, that is cash.

Right, so you're saying that Tesla is a company that would never do anything to increase the share price, besides trying to increase profits?

Companies can do whatever they want, it does not mean it will work. No company’s share price is going to up for years and years because of “hype”. And the hype is for future profits anyway.

The point is Tesla earns a lot of money, and has a good, proven trajectory.

Net income is not cash.

Close enough for the purposes of this conversation. Point is, they earn more money than they spend, the gap between those is growing. And they did it in a high barrier to entry business.

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