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[–] 9 points 1 week ago (5 children)

It only ends up being really "there" if the stake- and stockholders withdraw their shares and cash out. It's all paper valuations.

Many billionaires are actually what is known as paper tigers in that their wealth assets aren't real, (as in real estate) because the "wealth" is based on numbers on balance sheets and little else.

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  • [–] 11 points 1 week ago (3 children)

    Yes, it's something a lot of people don't seem to understand. The "value" of a company is it's stock price multiplied by all the shares and the stock price is pretty much just the last price someone was willing to buy a share at.

    If everyone goes and sells all of their Tesla and SpaceX stock and nobody ever buys any again, Elon Musk might not even be a billionaire anymore.

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  • [–] 6 points 1 week ago

    Nobody even HAS to sell their shares, the second part is what does all the lifting here: "and nobody ever buys the shares again".

    If overnight, everyone just said "I have no interest in buying at any price" that's the end of it. The shares are now worthless.

    Every seller needs a buyer. If "everyone sold their shares", all that happened is the share owners changed.

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  • [–] 3 points 1 week ago

    Musk would definitely still be a billionaire.

    He sold $1.2 Billion in SpaceX stock just 4 months ago. He sold $22.9 Billion in Tesla stock in 2022, partly to fund buying twitter.

    He’s 100% diversified some of that at the very least, even if he’s just parked some of it in the S&P and bonds. He also owns a couple hundred million in real estate.

    He wouldn’t be worth over $800 Billion, but he’d absolutely have at least $1 Billion.

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  • I think it’s absurd the argument gets made that rich people aren’t rich because their assets aren’t real like cash, meanwhile they leverage those assets into loans that are absolutley real and tax-free.

    The value is real. The absurdity needs to stop. You can’t say “tax the rich” out of one side of your mouth and then turn around and say “their wealth isn’t real” out of the other. This manipulation of terminolgy to obfuscate how wealth and assets work is pushed by the wealthy themselves to avoid anything that might increase their chances of being taxed. Seriously, if they came out and said “I’m rich as fuck thanks to my assets that I leverage into tax free loans!” How long do you think they’d last? Instead we argue over how “real” things are and say things like “The rich don’t actually have a lot of money…”

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