>>Shares on the other hand, do not get diluted with new shares going to third parties. Sure, we might issue shares in lieu of payment of $$ to employees, but we are not diluted by others.
Try telling this to the Nortel shareholders, who learned the other day that the book value of their stock was reduced overnight by two thirds, because the acquisitions that Nortel engaged in over the last few years, using its stock as currency, turned out to be largely worthless. Nortel wrote off $19 billion of its $30 billion book value. Cisco is in the same boat, and so are most other tech companies.
In fact, share dilution of technology companies is far worse that fiat money dilution through CB printing. After all, both CBs and technology companies are led by humans. And, in my experience, the humans at the head of CBs are considerably more conservative and cautious than the humans that lead technology companies. Also, the technology folks have many enticing opportunities to line up their own pockets at the expense of their shareholders, while the central bankers are largely free of conflicts of interest.
The record of technology company survivability speaks for itself: few technology companies survive for more than a generation, let alone a century.
Kyros |
