FieryTrainwreck said:
Therumancer said:
How responsible investors should be is a debatable point. Investors choose to put so much money into a company to gamble with. While they might have some say on overall policy, they don't manage things from day to day. The idea of an investment being that if something is going to fail, you can cut your losses. If investors could be chased down and made to pay for collateral damage beyond what they put into a company, the cost of failure would be too high and nobody would invest.
This really is the new greatest lie the devil ever told.
People invested in business before incorporation because the payoff was still immense: the highest quality of life possible.
All incorporation has done is remove any semblance of personal moral accountability while socializing, to some extent, the costs of failure. It's not like the ability to "cut your losses" removes those losses from the equation. They just get put on someone else. Usually people like "Studio 38 Spouse" and her family.
But yeah, let's keep propagating the lie that we somehow need additional incentives for investment beyond the fact that it's always been the best way to make money and enjoy the good life - provided you know what the fuck you're doing. Let's protect people who do the stupid shit these executives and primary shareholders did at the expense of the families they screw.
Well, yes and no. Your looking at it entirely from one perspective and at the problems with the system rather than the reason things are like they are.
Let's say you win the lottery, and a friend of yours approaches you to invest in a widget factory he wants to start up. It's a gamble but he thinks you can triple the money you put into the company inside of a year. Your pretty wealthy, and the guy is a friend so you figure "what the heck" and decide to put five million dollars into his company because you figure you can afford to lose that much if things don't work out. Two months after opening though you find out that The Chinese violated your friend's widget patent, secretly opened a factory a month before yours, and due to using sweatshop labour have undercut you below your minimal production costs and try as you might your business is now a bust (or pick whatever reason you want). Like all failed businesses the people the company you bankrolled hired are going to be out of a job. It sucks, but your already paying for the failure because you lost five million dollars, which you decided you could afford to gamble before you went in. To say you should be put into the poorhouse too is kind of ridiculous, and honestly would you have risked investing that money if you knew that?
Overall it's quite fair, you invest your money, you take your chances with the money you invest. The problem though is when you get operations beyond what I'm describing above. Situations like where you have investment groups of bankers who perform their investments using money that technically isn't theirs to begin with (a simplistic definiton of a bank is that you give it to them to use to invest and make money and in return they pay you interest for it's use). You wind up with executives who wind up buying companies just to polish them up and sell them for more money, or who invest in backing other groups of investors through loans and such. In such cases the guy in question might pay himself millions of dollars as a salary for his "management" out of the funds, and when things go to crap it's no big thing since it wasn't his money to begin with, and he just walks away with whatever he decided to pay himself to begin with. That's incidently how CEOS of companies managing numerous companies vote themselves pay raises, they are basically taking more money from the bank they run and personally pocketing it, with the money they are running their investments from all being the money people stored in the bank in exchange for interest.
The thing is the law has to be universal, in the eyes of the law where the money is coming from is more or less irrelevent as long as it's legal. The typical "fat cat" who wallows in the misery of others is a guy who never actually had a personal stake in what went under.
With 38 Studios from the way it looks to me, the investors, including the State Of Rhode Island, all took a bath here. It sucks for the employees, but all the people who put up money are probably reeling from it as well, granted as people who presumably invested spare money aren't in dire straights, but they still took a pretty substantial loss.
It might suck for those who were employed and lost their jobs, but being fired or laid off is always one of the risks, as is the company going belly up. It's not that I don't feel sorry for them, but in this case I don't think the State or investors like Curt Shilling really owe them much other than what might have been contracted (and of course the state has to pay unemployment and the like).
We will probably have to agree to disagree. To me this is just a sucktastic occurance that nobody wants to happen to them. Unless I find out more about how the business was run to change my mind (other than it being based around a stupid idea... making a WoW knockoff) I can't really find it in myself to get angry. I have no problem with investors as a concept. I do on the other hand have problems with bankers, and corperate investment groups. I think most of the problems occur when the people making the investments don't have a personal
stake in what's going on other than perhaps their reputation. Everyone involved here seemed to feel it, it wasn't a situation where 38 Studios got written off because it only made 10 million dollars in profits rather than 100 million, and the investors want to put everyone out of work so they can take the money slated for it and stuff it into another project they hope will be more profitable, and the people running the other business (which wasn't failing in any real sense) be damned.
