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That's true except in markets where saturation has been achieved. In a market with 80-100%+ saturation, the per subscriber revenue does not increase year over year. In these cases, creating a customer doesn't actually increase shareholder value because there aren't enough customers that can be created to combat the atrophy of existing revenue.

Jack Welch was hugely successful in creating and competing in new markets specifically because competing in saturated markets is not profitable.

Those models are great for industries in the 0-80% saturation growth period, but aren't really applicable to high saturation markets.




The issue is that value doesn't necessarily mean money. In terms of money, is Apple really the most profitable company in the world? We know that it's not, so why do they have the highest market cap? Because people value their shares for more than just the present dollar value. People want to be part of Apple regardless of its profitability.

The negative shareholder value argument depends on a summary characterization of all investors as people who only care about money. Not all investors are like that. You can create shareholder value out of anything that your shareholders value, which is not to say that "shareholder value" should even be a serious metric. It's just a narrative that anti-corporate people have drummed up.




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