It feels like economics in the US is turning into FanDuel mobile gambling. Can we pass a law to disincentivize this garbage and make them start paying dividends again?
Feels gamble-y when the shovel maker is playing weird VC for the gold prospectors like this, but I get the appeal since Nvidia stands to lose everything if this stuff tanks anyhow and it further entrenches Nvidia's own position all while keeping the hype train steaming by moving units.
You can fund your education with part of your future job earnings.
In a perfect world companies should just do their business and nothing else. Companies shouldn't be able to own other companies because that's gambling on their value. They shouldn't be allowed to do stock buybacks because that's gambling on their own value (and a kind of insider trading).
In our world however companies are free to gamble on the side as long as their owners don't mind.
Whether what Nvidia does is the best or the worst idea, only time will tell.
Heres the thing, these assets deprecate, while the stock doesn't. I see a big asymmetry in deals like this, and I do not like it. When you start a business and become indispensable to your customers, you're doing well. If a company fails, it is maybe unavoidable. In situations like this, the risk increases because now these companies are interdependent not only as suppliers and providers, but in their intrinsic value and likely decision making insofar as shares can be voting shares. In any case, the C Suite and board sure know who owns %10 of the shares.
>In our world however companies are free to gamble on the side as long as their owners don't mind.
This constitutes an enormous systemic risk. We are treading in dangerous waters. The owners are not the only stakeholders in a company.
> This constitutes an enormous systemic risk.
Tell me about it. 2008 crash was a result of exactly that. Banks instead of doing banking focused on gambling on risky assets and lost. Nvidia gamble is looking less obviously bad.