As always, these sales happen on a predetermined schedule for executives. This has nothing to do with the layoffs.
Yes, so if he sells regularly and is in charge of decisions that affect the price - what difference does your justification make?
Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
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Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#112Isn't this considered insider trading? You'd think there should be a blackout period around any kind of layoff, similar to how they do with earnings.
How is it insider trading? He sold the stock after the material became public knowledge. He didn't have any insider information
But he has the power to create the material...
Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#113Earlier quoted context omitted.
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The alternative is a workers' union, by which this kind of thing could be mitigated for the actual people who do the work.
I agree that in a free market, workers should be able to unionize freely.
Having said that, this CFO is also an actual person who did actual work. Business owners don’t hand over this much pay & equity for nothing.
They may or may not be an asshole with the timing of this trade.
But the system produces so much wealth for the poor and middle class that this type of thing is a rounding error.
Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#114Earlier quoted context omitted.
> He can sell his shares when he feels like it He, in fact, cannot. As a C level executive he is going to trade on a 10b5-1 schedule.
Thanks for the insightful comment. I guess they can still conveniently schedule when the layoffs are announced and make it happen right before the 10b5-1 schedule? All the previous layoffs announcements were followed by the stock rising up.
Exactly. The 10b5-1 schedule is a layer of misdirection, but the executives still have their hands firmly on the levers of price manipulation.
Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#115Earlier quoted context omitted.
It's not like the CFO has any more information than they do.
Well, he had to sell them _after_ the fact. But it does sound like his opinion on the cut downs is different than the market.
Not necessarily, the article didn't say what percentage of his stock he sold. It's pretty normal risk management to diversify your portfolio and he could have just needed the cash. Interest rates are pretty high right now, maybe he wanted to pay off something instead of using his line of credit.
Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#116Earlier quoted context omitted.
If you agree with the narrative of shareholder primacy and are looking at short term outcomes then sure, nothing is wrong here. But this means that we're ignoring the harm that was done to the people that lost their income and the disruptions that the rest of the org will experience. Layoffs can be devastating to the people that were terminated; a job loss is one of the higher stress events one can experience. If you…
> But this means that we're ignoring the harm that was done to the people that lost their income and the disruptions that the rest of the org will experience. As opposed to the 'benefit' that was done while they were granted income? I'm unsure what your point is. Is a business never supposed to 'harm' its employees? They're never allowed to fire people? What is the logical conclusion of your statement? A business oug…
The argument that businesses should never 'harm' their employees by laying them off is a straw man. No one is suggesting that companies be legally bound to keep all employees indefinitely. However, there is a vast difference between making strategic adjustments and engaging in practices that unduly harm employees for the sake of short-term financial gains.
Moreover, the U.S. government provides ample protections for companies, allowing them to restructure, refinance, or ironically even declare bankruptcy (a process I don't think you understand based on your comment) in an orderly manner to either save the business or ensure that creditors and employees are treated as fairly as possible in the event of a closure.
The implication that government intervention is 'magical thinking' is a misrepresentation. Government policies are not about preventing all harm but about providing a safety net that cushions the blow for individuals while allowing the economy to remain flexible and resilient. This dual approach helps maintain a stable economic environment where businesses can make tough decisions without causing undue distress to employees. I think it's a very easy argument to make that the lack of regulation in the realm of employment has made our economy quite unstable so that a small number of people can extract more wealth.
The logical extension of the argument for employee protection is not to make businesses unviable but to ensure that the economic system is equitable and that the inevitable pains of market fluctuations are not borne disproportionately by the workforce. Capitalism, supported by thoughtful government regulation, provides a framework where both businesses and employees have rights and protections, allowing for a balanced and fair economic landscape.
Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#117Earlier quoted context omitted.
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You say all this as though we didn't get to capitalism by iterating. What, are we supposed to stop iterating now because we're more comfortable than we were before?
Iterating means refining what works, which means we have to take a step back and recognize the successes of capitalism over the past couple of centuries.
Only then can we intelligently try to address any failures in a non-destructive way.
Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#118Earlier quoted context omitted.
You say all this as though we didn't get to capitalism by iterating. What, are we supposed to stop iterating now because we're more comfortable than we were before?
Iterating means refining what works, which means we have to take a step back and recognize the successes of capitalism over the past couple of centuries. Only then can we intelligently try to address any failures in a non-destructive way.
You say "Only then", but in the US these failures already were being addressed (see: New Deal) until they were pulled back in the 80s. I think people are rightly frustrated by this.
Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#119Why do so many tech executives seem to make the actual worst decisions possible when it comes to symbolic leadership?
Executives aren't able to time their sales of stock to events and they shouldn't be able to as it would lead to more manipulation. It is likely the sale of stock was planned ahead of the layoff announcement timing.
As was pointed out in this comments section, they are able to time events to their scheduled sales of stock.
Re: Spotify CFO cashes in £7.2M in shares after value surges on news of job cuts
#120Earlier quoted context omitted.
It should actually be very very expensive for a company to fire people. Why do stock markets have an automated forced "PAUSE" when stocks seem like they are crashing? It's because companies, investors, people, or even computers don't always act rationally. That pause has prevented a lot of hiccups from turning into full-blown crashes. Right now, when a company lays people off, the town, state, and federal government…
> when a company lays people off, the town, state, and federal government are the ones who have to end up picking up the downstream effects If the existing unemployment _insurance_ (forced payroll contributions to each State) are not sufficient, then change that insurance system. There could be a business opportunity for supplemental market-priced contributions which pay on job loss. That wouldn't be worse than the '…
Unemployment insurance can't, and shouldn't be designed around market acting irrationally. That's not a reasonable insurance plan.
> then change that insurance system.
Also, more about this, why? We have a ton of levers and controls we can utilize here. Why does it need to be that the insurance system needs to change? That seems like we're closing off a lot of levers _just because_