1/6 It's not that complicated. When a company issues #stock to employees or the public, it increases shares outstanding and dilutes #earnings per share.
2/6 Give the #stock to the employee, and the cash doesn’t show up on the balance sheet. Robbing Peter to pay Paul. In #broaddaylight
3/6 In the run-up to the peak of the dot com bubble, #stockcomp felt good. Until the stocks started going down and it felt awful. That is precisely where we are today. It tends to be a self-reinforcing spiral.
4/6 The #chart below shows
➡ The total #marketcap of stocks where over 1/3 of their revenues are given to employees in the form of stock com
➡ See that crashing line lower? History suggests it is going to keep falling
➡ The total #marketcap of stocks where over 1/3 of their revenues are given to employees in the form of stock com
➡ See that crashing line lower? History suggests it is going to keep falling
5/6 That decline will not feel good for the #employees or the owners of these stocks.
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