>>21410296let me see if i understand correctly- while an oversimplification, the fact is that stock investors essentially use the first order derivative of profit to gauge if a company has continued long-term holding potential. They buy it on the prospect that it will be worth MORE in the future, which, in order to do so, the company cannot merely be profitable, rather, their degree of success must also continue to rise.
However, this leads to a situation whereby the company must eventually either raise prices in order to continue to report a growth in profit, or must cut corners, in many cases doing both. they will go to great lengths to buy back shares to create the image of a healthy stock price, too. More than anything else, however expanding their market access by opening new locations where new sales can be made contributes to profit gains, until all markets have been exploited. Eventually, these measures too prove unsuccessful, and the company has no choice but to pivot. Pivoting sometimes proves successful but rarely as successful as their primary source of revenue, and sometimes competitors come along that further damage their leadership standing. Eventually, a loss of faith in the company sends shares plummeting, causing the ownership to transfer to new hands. The new hands are in the exact same situation, but eager to try to make some profit, any profit, to drive the share price back up so they, too, can sell, they try increasingly strange or ethically dubious things, cutting even more corners, firing career employees, destroying the company reputation in the interest of short term gain. Eventually, the company goes into receivership or bankrupcy, and its assets are consumed by its competitors. What was once a booming enterprise, much like a mushroom ring, dies out. Because it could not continue to expand, and because expansion was the sole thing creating sufficient optimism for it to succeed.
This happens to all companies.
