I think a more nuanced take would simply be that the long tail of a perpetual bond is unlikely to be worth that much, which is why these days bonds with extremely long maturities aren’t issued.
As an example, the reason that coupons (like $1 off a box of Wheaties) or refunds (good for 1 airline ticket) and similar "financial instruments" have expiration dates on them is because it is required by accounting rules. When those items are issued, companies need to put them on their books as liabilities, and having to keep around an ever increasing accumulation of liabilities for many years would give a "wrong" picture of the financial health of the entity, when the purpose of books is to give a "right" picture.
(your take is not more nuanced, it acknowledges this practicality aspect. to extend the newtonian/einsteinian analogy, you're advocating ignoring the ∆x² term as the lim ∆x→0 version of the calculus derivative rather than the approach taken by analysis :)
This is why they're treated as a liability in the company books. You can guess or bet that all of your outstanding gift card balances won't be redeemed at once, but there's really nothing preventing that from happening and causing cashflow problems for the company. And there's lots of overhead involved in tracking many many thousands of small balances on cards into perpetuity.
Much easier to encourage people to spend the gift cards and get your financing from proper, predictable business loans or bonds.
Then, if they have any wiggle room, they can get a further increase by buying back a bond of higher yield sooner, modulated by expected cash flows.
>Much easier to encourage people to spend the gift cards and get your financing from proper, predictable business loans or bonds.
That doesn't follow at all. The longer the gift card goes without being spent, the more free money they get. There's no net benefit to the goods being called sooner.
Imagine a business where people give you cash and don’t ask for 5% or so of it back. Meanwhile your use of that cash is regulated with a feather (compared to a bank or other deposit-taker) and you can earn some yield while you wait for people to ask for their money back.
Gift cards are very lucrative at scale.
https://www.ftc.gov/news-events/news/press-releases/2010/11/...
What I’m talking about is the provider of the gift card writing off some portion of the liability of gift cards they have sold that people will never spend because they forget about them and lose them and so forth.
But this wasn’t just finance for finance’s sake. The bond funded flood protections for the dangerous, waterlogged land where she and her family lived. It kept her community safe. Yet all people talk about is, “Wow, she bought a really old bond!” No, she made a real investment in her family and neighbors’ future. The 400-year part? That’s just the headline.