• Strangle@lemmy.world
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    1 year ago

    It’s not just about liking the big buildings. It’s also very much tired to company evaluation numbers and stock price.

    Real estate is a huge part of company asserts and they reflect in the stock price.

    Why do you think these huge mega companies publicly traded have these trillion dollar campuses and stuff? Private companies would find that a little bit crazy, when they are more focused on having actual cash in the bank.

    The real estate isn’t an ego thing, it’s protecting and growing the price of company stock

    • Semi-Hemi-Demigod@kbin.social
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      1 year ago

      A lot of companies with large campuses have gotten concessions from local government, since the workers will increase economic activity in the area. So part of it is also that city governments are putting pressure on companies to get people in, and they might lose millions in tax breaks they got for building in their city.

    • FiveMacs@lemmy.ca
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      1 year ago

      Don’t forget they also invest in companies that buy/own buildings too…it’ll hurt their bottom dollar across the board

      • Strangle@lemmy.world
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        1 year ago

        I’m not convinced the bottom dollar is as relevant as the stock price.

        These companies make baffling dollar decisions, like having these trillion dollar campuses, that would make no sense at all to the bottom dollar.

        It would seem wasteful. But for the stock? Well that seems like a different story. What does having trillions in real estate holdings under a company name do to the stock?

        • Num10ck@lemmy.world
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          1 year ago

          well it helps the book value as an asset but it hurts the available cash and the liquidity of assets and the return on assets although the depreciation is a big write off. its not a great use for most companies to sit on brick and mortar that aren’t generating revenue. but whats the point of having a high floor corner office if nobody is around to pretend to care?

    • chicken@lemmy.dbzer0.com
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      1 year ago

      But, couldn’t the company sell their real estate and pay that out to shareholders while retaining the same profit potential?

      • Strangle@lemmy.world
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        1 year ago

        They can also sell product to customers, but often over stock items for the same reasons.

        Showing trillions of dollars in assets, with inflated inventory dollar values makes the company look more valuable, which impacts the stock price.

        I’m sure there are a dozen ways to skin that cat, but this is how C-Suite execs seem to prefer to make their stock go up