alt Hacker News> The moment a company goes public they're legally required to make stupid, short-term decisions that are worse for everyone
FWIW this is a myth.
Replies
MrFantastic • today at 3:11 PM
Short term thinking is because of incentives. Executives are given options so they want to juice the stock price while they are CEO.
intended • today at 3:37 PM
eh...
You would be right technically.
Practically? a firm that isn't competitive, will have lower multiples, will trade at lower stock prices, and that will make it an attractive takeover target.
Just buy the firm, drop the practices that don't improve stock price, and then pocket the difference.
It doesn't happen all the time, and some firms may have enough of a war chest to avoid this fate.
However, the pressure does exist, and it does drive conformity in behaviour.
Maybe it's overstated? It cannot possibly be a myth.