It's not shareholders specifically, but management that doesn't give a shit about the company long term.
The business has a fiduciary duty to benefit the shareholders, but it doesn't have to be short term only, or at the cost of long term benefits.

Most publicly traded companies end up with leadership who are only interested in justifying their employment through the next earnings call or making sure the stock price has gone up between when they last got options and when they next vest.

Valve does good not because they don't have shareholders, but because their leadership is not gonna get fired for thinking about next year instead of next quarter. So they don't squeeze the consumers for every dime, so people stick with them, and developers stay even though their fee schedule is not the best because they have all the people.

[–] [email protected] 2 points 7 months ago* (last edited 7 months ago) (1 children)

This is kind of true. But the leadership often answers to the board of directors, which have often been shareholders that buy into control of the company after it goes public. At this point, you have shareholders who own no personal stake in a company. Often their only goal is to make a profit, sometimes they're "serial entrepreneurs" who make their millions getting on boards and "flipping" the company to make a huge profit in a short amount of time.

So it's kind of management, but it's also management brought on by the presence of public investment in a company.

Combine this with the fact that the law has come down more than once on the side of choosing options that make the company money over maintaining company policy and you get a really terrible culture of publicly traded companies gouging themselves for short term profit (or even long term profit done in a shitty way.)

Oh, I realize I repeated some of what you said. But you did say "it's not about shareholders" to be contrarian, then went on to explain (like I did) how it's actually exactly because of shareholders.

Edit: what the fuck I literally can't comment on the comment below.

[–] ricecake 2 points 7 months ago

I wasn't actually trying to be contrarian, but okay.

I'm pretty sure I didn't explain how it's actually shareholders, because the board of directors isn't "the shareholders", but leadership of the company.

Valve isn't publicly traded, but it's still a corporation with shareholders, a board of directors, and the usual trappings of corporate leadership. They tend to operate in a not shitty way because their leadership isn't interested in sacrificing greater long term profit for lesser short term profits.
A private, family owned partnership style business can operate with a focus on short term profits over long term profits.

The safest way to ensure that the leadership of both of those businesses out as much money in their pockets as possible is to continuously maximize short term profits. "The shareholders" aren't the cause for that mindset.

[–] [email protected] 1 points 7 months ago (1 children)

Valve does good not because they don’t have shareholders, but because their leadership is not gonna get fired for thinking about next year instead of next quarter. So they don’t squeeze the consumers for every dime, so people stick with them, and developers stay even though their fee schedule is not the best because they have all the people.

All of that short-term thinking is because of the stock market. All of their shareholders think of, day in and day out, is "line go up".

[–] ricecake 1 points 7 months ago (1 children)

Well, I'll disagree a bit there. The largest stock investors are institutional investors managing funds on behalf of retirement plans. Those investors tend to prefer consistent long term growth over a narrow quarterly growth target, and will actually look at things beyond just stock price, like strategy and long term market prospects.

Short term thinking from the leadership team is them not having a good idea on how to provide the long term strategy that investors prefer, and instead hoping to appeal to the smaller group of investors who do only care about short term growth so they can secure their own payoff, potentially at the expense of the long term prospects of the company.

Valve is a corporation. They have shareholders other than Gabe, many of whom are not employed at valve of in their leadership team. Their leadership team isn't looking to ensure that their paycheck comes in over the future of the company, so they make good choices.
Compare with companies like Coca-Cola, which are publicly traded but have that long term plan that lets them openly talk about sacrificing revenue to pursue product plans and market growth that leads to more stable long term profits.

[–] [email protected] 0 points 6 months ago

The largest stock investors are institutional investors managing funds on behalf of retirement plans. Those investors tend to prefer consistent long term growth over a narrow quarterly growth target, and will actually look at things beyond just stock price, like strategy and long term market prospects.

Based on what evidence? They just make sure the line steadily goes up each quarter, instead of accounting for companies that invest potential profits into longer-term plans. If not, the 401K investor will either drop the stock, or put it in a higher-risk plan.

That sort of thinking is akin to corporate suicide when in a publicly-traded market, so they don't do it.

A company like Valve isn't publicly-traded, and they have a limited number of investors they can talk to about their plans. That and they have a reputation of quality products, so even the investors are going to put up with short-term drops in profitability for even more profits.