alt Hacker NewsI thought about that a lot too, and in the end I think it just comes down to stupid economics: What do you want them to do with all this money?
1) Most top US tech companies are flooded of money. Everyone dumps money in the SP500.
2) This money has to go somewhere. You can't just redistribute it as dividends, otherwise it's an admission that you won't grow and giving you more money would be a 0 sum game.
3) So you have to invest it somehow, somewhere.
4) Obviously you can spend that money buying whatever company you can.
5) Once you've bought realistically enough, you just hire more, and people will think that there should be some kind of linear relationship between resources spent and revenue growth.
6) You can also do grand projects, like the metaverse, convert all you software to blockchains, become AI native, etc. and dump billions on these.
So essentially it's all about projecting growth and potential.
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> You can't just redistribute it as dividends, otherwise it's an admission that you won't grow and giving you more money would be a 0 sum game.
I don't understand the logic behind this.
Facebook doesn't get the money when you buy a share of META -- that goes to the person you bought the share from. They could do an offering to raise money, but they aren't. They've been doing the opposite, they've been buying back shares at a significant rate. Some of it is to offset stock based compensation, and some of it is just stock pumping.