I don't remember why I included that. It was probably just a knee-jerk dig at the GOP and their hypocrisy concerning bailouts.
Get to know an NBA owner!
- Thread starter r_u_s_t_b_u_c_k_e_t
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I don't remember why I included that. It was probably just a knee-jerk dig at the GOP and their hypocrisy concerning bailouts.
Joe Bagadonuts
Well-Known Member
Examples are easy to find. Amazon was founded in 1994 and didn't have their first profitable quarter until 2002 (one penny per share). After that they lost money in subsequent quarters. They weren't even close to profitable in their first decade, yet investors made fortunes.
Joe Bagadonuts
Well-Known Member
Amway and the Orlando Magic received government bailout money? Do you have documentation of this?
I'm no expert. I don't necessarily doubt your claim that examples are easy to find. However, Amazon's stock price history looks pretty flat to me, outside of the dot-com bubble and the period since 2007 when the company was finally making money.
https://en.wikipedia.org/wiki/Amway_Center#Financing
The City of Orlando paid more than $400 million toward the construction of the Amway Center.
Joe Bagadonuts
Well-Known Member
Stock price, on it's own, is not a measure of a company's value. Even if the price per share were flat, what would happen to the value of a company if the number of shares outstanding looked like this: https://ycharts.com/companies/AMZN/shares_outstanding#zoom=10
If the stock was splitting, the investors were making money. If the company was issuing new shares to fund capital projects, the invstors were not making money.
TheItinerantSon
Well-Known Member
the graph starts in 2002 - thats when teh company started making a profit. How does that tell us about what happens to a companies value while it is losing value.
Joe Bagadonuts
Well-Known Member
You have to sign up to get a graph that goes back farther than that. I'm not going to do that so I just showed the history I was able to. I'm confident that Amazon followed the path I claimed it did (owners made fortunes while the company failed to turn a profit). And by the way, stock splits aren't the only way that an investor's value can increase while the stock price stays flat. Another very common way of rewarding investors and employees is granting options.
Joe Bagadonuts
Well-Known Member
Amazon's founder is a self-made billionaire. I saw one estimate that put his fortune at $1.5 billion in 2002 (which was before his company became profitable). He was #147 on the Forbes list by 2006 (https://www.forbes.com/lists/2006/10/RYMV.html). Despite what any of you are suggesting, it's by no means an NBA phenomenon to make big money from a company that isn't turning a profit.
I agree there. I worked for a company that sold services to credit cards. An indivdual marketing campaign took two years to be profitable. Because the company was growing for several years, there were always more campaigns currently losing money than currently making money, and so the company lost money, even though the marketing campaigns were all profitable. Since investors invested by the campaign (as well as owning stock), investors still made a profit.
Joe Bagadonuts
Well-Known Member
It is beyond moronic to call that a government bailout. As I said before, I disagree with the philosophy of extorting a city to build an arena (it's something that Larry Miller didn't do and that David Checketts did in the SLC market) but if the city decides to pay it's because they believe they will reap benefits worth at least that amount. It is definitely not because they are bailing anybody out.
the government didn't expect to reap rewards when they bailed out GM? Chrysler? Wall Street? what is the difference? hell, they already got most of that money paid back from those three. how much has the Magic paid back of that $400 million they got for their arena?
Neither does claiming you are losing money mean you are actually losing it. No one has seen the books of the teams. Of course both sides want to earn/keep as much money as possible. The Players have already said they would take a cut (52 or 53 percent of BRI). What have the owners offered up monetarily? Nothing!!! All they have done is whine about not making enough money. Why did they get into the NBA if it is such a bad business? There are other billionaires just waiting to to get a piece of the NBA. That isn't my opinion but the opinion of David Stern. He has mentioned expansion and how popular the league is. The problem isn't only the owners fault but trying to argue that the players should go from 57 to 49 percent after one of the most popular season in recent NBA history. TV viewer ship was up. Yes the economy sucks but why is it that the richest people want to make the least amount of sacrifice. Sorry until the league actually shows us the books I won't feel too sorry for them. Even if I saw the books, I agree that the owners still can and do make money. In my opinion, most of the losses are certainly the result of bad contracts and mismanaging the rosters of teams. Why should the players and the fans bail them out for mismanaging their business? Besides the fact I pay money to see the players play, I don't care who the owner is except for the fact he brings in good players. Are the players overpaid? Are tickets too expensive? I will have to find other forms of entertainment until both sides realize how lucky they are and make a deal. I think both sides have fault but my small amount of sympathy lies with the working man -"NBA Players", fans and all the little people who are losing their jobs because billionairies want what they want.
Joe Bagadonuts
Well-Known Member
You win. My logic is no match for your ignorance.
I guess the difference is that the $400 million did not go directly to Amway or the Magic so there was nothing to pay back. It went toward the construction of an arena that the City of Orlando owns. I'm not sure it qualifies as bailout money but I see your point. It probably benefitted the Magic more than the City of Orlando because publicly funded arenas don't generally result in a good return on investment for the cities that build them.
It's a hard-knock life.
maybe we're just talking past each other. i consider government intervention on behalf of a failing private enterprise to be a bailout. the city of Orlando spent the money to build the arena for a private enterprise called the "Orlando Magic" that was allegedly losing so much money in the previous arena they were going to fail and skip town. someone else (you?) might call it "incentives", or "subsidies", or "troubled asset relief". to me, that is just semantics.
Joe Bagadonuts
Well-Known Member
Failing and skipping town are not the same thing.