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Lawsuit against Meta invokes modern portfolio theory to protect shareholders

corpgov.law.harvard.edu

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Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders

#91

Post by hn_throwaway_99 »

msh wrote: post #86
celestialcheese wrote: post #64

Earlier quoted context omitted.

You could make this argument that Apple has done this with their IDFA changes. Wipe out the public water source (data attribution) to benefit their internal apple ads (new DSP + Apple app and search ads). Overall portfolio effect of that IDFA change has been extremely negative for every company but Apple. Should I as a shareholder of both Apple, Meta and Google be able to sue Apple for their changes?

You could just as well argue that apple have done a public good by preventing pullution (data sharing) by other companies.

All of these arguments pretty much point to the absurdity of this lawsuit. It's not hard to pull lots of different second order consequences out of your ass and then point to some big, societally impacting company as the source of whatever consequence (good or bad) you can dream up.

Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders

#92

Post by WastingMyTime89 »

seanhunter wrote: post #81
gfaster wrote: post #69

Earlier quoted context omitted.

How nice would it be if corporations were held accountable for externalities? You'd almost immediately have all the big fossil fuel companies, automotive manufacturers, and likely banks sued into oblivion for defrauding shareholders. IANAL, but I don't think this will hold up.

There is a theory in economics that the government could do this by imposing taxes on negative externalities.[1] The purpose of these "Pigovian taxes" is to make society whole for these negative externalities and ensure that over time the prices of goods reflect their total marginal costs, not just the direct costs to the producer. Of course there are practical problems in estimating the right level for these taxes a…

It’s not a theory for any meaningful sense of the word theory. The government could indeed price in externalities through taxes if it so desired. Also it’s not “Pigovian taxes”, it’s just Pigovian taxes. That’s exactly what a Pigovian tax is. No need for quotes here.

Taxes are regularly used to encourage or discourage investments. The fact that no government does is a political one.

Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders

#93

Post by sicp-enjoyer »

lifeplusplus wrote: post #40
sicp-enjoyer wrote: post #34

Earlier quoted context omitted.

The CEO is still the chief executive. Share voting rights do not control day to day business decisions or even strategy.

you can replace the CEO

Do you have someone in mind for meta? Or just change in general?

Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders

#94

Post by seanhunter »

WastingMyTime89 wrote: post #92
seanhunter wrote: post #81

Earlier quoted context omitted.

There is a theory in economics that the government could do this by imposing taxes on negative externalities.[1] The purpose of these "Pigovian taxes" is to make society whole for these negative externalities and ensure that over time the prices of goods reflect their total marginal costs, not just the direct costs to the producer. Of course there are practical problems in estimating the right level for these taxes a…

It’s not a theory for any meaningful sense of the word theory. The government could indeed price in externalities through taxes if it so desired. Also it’s not “Pigovian taxes”, it’s just Pigovian taxes. That’s exactly what a Pigovian tax is. No need for quotes here. Taxes are regularly used to encourage or discourage investments. The fact that no government does is a political one.

To be clear, when I say theory, the theoretical part is not that these taxes could exist but that the tax could adequately price in negative externalities, which is hard because generally price discovery is hard to do and in particular one of the things about the negative externalities of lots of activities is they are not fully known at the time the goods are produced. eg when the would was going ham producing asbestos it was probably not fully appreciated quite how harmful that was. So lots of the information which would be the raw material for that price discovery is unavailable.

Governments do sometimes impose pigovian taxes and as you say, this can be politically unpopular which is why they don’t always stick. For example, in the UK there was the “fuel price escalator” which was a direct response to climate change. The government decided to impose a tax on retail petrol and diesel prices that would rise in line with inflation or faster to encourage people to move away from fossil fuels over time. It led to a weird uprising where truck drivers picketed oil depots and the country ran out of fuel so the escalator was abandoned.[1]

[1] https://en.wikipedia.org/wiki/Fuel_protests_in_the_United_Ki...

Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders

#95

Post by lifeplusplus »

sicp-enjoyer wrote: post #93
lifeplusplus wrote: post #40

Earlier quoted context omitted.

you can replace the CEO

Do you have someone in mind for meta? Or just change in general?

who should be the CEO is besides the point, certainly many more talented and driven people out there

Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders

#96

Post by sicp-enjoyer »

lifeplusplus wrote: post #95
sicp-enjoyer wrote: post #93

Earlier quoted context omitted.

Do you have someone in mind for meta? Or just change in general?

who should be the CEO is besides the point, certainly many more talented and driven people out there

I think highly accountable tech CEOs with experience managing large organizations, and executing long term visions, are in shorter supply than you suggest.

But to bring it back to the context here. The shareholders can fire a CEO, but he runs the company. If you don't know who that person should be, or what traits they should have differently, I don't think it would be that valuable to have voting rights.

Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders

#97

Post by pacerier »

arjvik wrote: post #63
Kranar wrote: post #52

Earlier quoted context omitted.

I know I should interpret every comment in good faith, but it really is hard to understand how you can read my comment and make such a reply. It feels like you didn't actually take the time to understand what I said or even read the article before commenting. At any rate, if a company found a cure for cancer the stock market would absolutely skyrocket in a way almost never before seen. It's unbelievably hard to imagi…

What's to say the stock market would skyrocket? Especially if this cure is accessible to everyone and published freely online, the only direct effect is pharma companies stocks crashing because of a loss of oncology drug revenue. Who's to say what the rest of the stock market would to to react? Even if it's a tossup, does that mean there's a 50% chance of the inventor of such a cure being liable for that crash?

It doesn't work like this. If it's a tossup (ie probability =~1:1) then there's no legal liability. Importantly, whether the cat's dead or alive is irrelevant.

The issue here is that it's not a tossup. The probability is >=2:1 hence the liability, even if that is alive after the plunge.

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