Headline after headline say that companies “failed” and/or didn’t hit “targets”, but when you look at the numbers, the company made profits, sometimes in the millions to billions, it just wasn’t “enough”.
Is this greed? Why is it not good enough to make a profit?
In: Economics
>Is this greed? Why is it not good enough to make a profit?
Yes. Because folks want growth.
ELI5: You sell lemonade at a stand, and at the end of each day, after you subtract the cost of your lemons, sugar and water, you make $10 per day. Because of reasons, you can keep doing this forever, constantly making $10 per day profit. Not bad, but that’s all it’ll ever be.
However your buddy sets up his own stand and works to find a way to reduce the cost of the lemons, sugar and water (he finds a deal that allows him to buy for cheaper) so now he can make $12 per day. That’s better.
But more importantly, that gives him more money to power growth: maybe he uses the extra money on advertising to bring in more customers, which is more product and revenue. he strikes a better deal on his supplies so he can buy in bulk, so now he’s making $15 per day profit. With that money he then opens up two more stands, now he’s making $45 day per profit. Soon he’s making enough money that he makes you a deal you can’t refuse and buys YOUR lemonade stand.
Sure, you did ok and sold out and are comfy, but your buddy is now the lemonade kingpin of your neighborhood.
The expectations part is all the people that are investing in your buddy’s lemonade stand after he got so big he went public. If his stand didn’t meet expectations, that means that his forecasting was off and did something wrong, the stock price drops and people don’t want to invest as much money in it. Which has its own set of ramifications.
EDIT: added missing words
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