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@cwebber@octodon.social Its likely a coincidence. The selling of a companies stock from one stock holder to another has no effect on a companies operating funds. It can change the valuation of a company, but not the ability of that company to pay employees.
This is an easy confusion to make as the sale of stock can under other circumstances generate funds for internal use. This happens only when a company sells stock the company itself owns, or creates new stock (increases number of shares) and then sells that. Since in that case the company is selling the stock it generates money for the company. Also the reverse is true, if a company performs a stock buy back then it would loose operating funds.
But yea, Elon selling his shares has no direct impact on how much money tesla has in the bank.
@freemo Huh, I would have thought this was referring to a different mechanism -- laying off people is one of the easiest ways of lowering operational costs, which results in the company valuation growing, which results in stocks' price growing. So the relation I would expect would be reverse to what you are describing -- not "I have to lay off people, because I won't be able to afford paying them after selling the stocks" (which I agree makes no sense), but "if I lay off people now, the stocks' price will grow, so I won't have to sell as much stock to afford Twitter".
Obviously rather than "grow" I would expect "fall less", since announcing that you'll have to sell lots of stock will most likely impact the price much more.
@cwebber@octodon.social
Its a bit more complicated than that. Yes laying off people does increase short term money flow but long term it may reduce or increase money flow depending on if the decision was made wisely or not. You need people to develop your products and the rate and quality of the products you produce determine your long term income. So layoffs can easily cause long term income to go down, and often does.
If the hiring and firing in a company is done right it is based on one thing, whether doing so will be in the best interest of the company's future or not.
@cwebber@octodon.social
@freemo I know it's not that simple, otherwise firing all workers would be a winning strategy. :D My point was that the stock market reacts to layoffs with stock rises, presumably based on something like the reasoning I described above. I only know about the reasoning because someone tried explaining to me why companies do that and why it apparently works.
Probably if they were too obvious about the attempt it would fail, but I'm not sure -- the short term gains might be enough for a short term change in stock price, which is all you want when you want to sell a lot of stocks.
@cwebber@octodon.social