Maximizing Shareholder Value

It's almost impossible for a public company to announce that they are going to reduce revenue or profits for the next quarter without taking a hit in its valuation. Short-term economic indicators seem to override any other long-term indicators, if such indicators even exist. So, many public companies do whatever they need to keep meeting shareholders' short-term expectations.

One of the actions that has short-term, almost immediate effects in reducing costs is laying people off. Four of the big five have announced massive layoffs for 2022: Meta, Microsoft, Amazon and Google. Of course, there is more to these layoffs than appeasing investors. But there is a strong correlation.

As Jason Fried, CEO of Basecamp said recently, "I can’t imagine anything less interesting in business than maximizing shareholder value."

public companies, basecamp, shareholder value

Join my free newsletter and receive updates directly to your inbox.