Apple has the right idea when their stock starts to struggle.
Forward mention, because of who I am writing about, I have taken out some very funny but possibly dangerous parts, prior to posting.
It's called a buy-back, and Steem could really use this right now to prop up the value of Steem.
You see the way it works is when a company has been having a tough quarter, just prior to reporting earnings they will do a Buy-Back to essentially lower the number of shares in the investors hands.
Why would they do such a thing? It's sneaky and I'll tell you why!
Lets just say for simplicity there are 100 shares total in Apple and the average consensus from analysts is that Apple will earn $1,000 per share. Unfortunately, Apples CFO advises Tim that they will earn $900 per share.
This is terrible, If Apple misses guidance their stock can, and usually does drop. Quite quickly I might add!
Then, Tim Cook has every rich friend on the phone saying whats going on, I am losing money!!
So Timmy reaches into Apples glorious 100 Billion $$ cash jar and buys back 10 market shares, and takes them off the open market and back into Apples control.
Incase your wondering here's the Math:
This was Analysts guidance. 100 shares x $1,000 = 100,000 profit = $1,000 profit per share
This was result before Buy Back. 100 shares x $900= 90,000 profit = $900 per share ( Below guidance )
This was result after Buy Back. $90,000 profit / 90 shares = $1,000 profit per share ( We made guidance Party Time!! )
Now when the CFO reports the numbers guess what, they have miraculously done it!!!! Who would of ever doubted Apple, they never miss a target!
Sadly, fortune 500 companies have been doing this for a long time, and the journalists who report on earnings very rarely mention this tactic. I will give credit to Jim Cramer from Mad Money he brings it up often.
But basically we are being tricked into believing that a company has done exceptionally well when in fact they have done terribly!
Be cautious with money market reporters they either do not do their jobs well, or have their own interests at heart. Read the quarterly financials going back a year, and see how many shares are on the market. It's the only way to be sure that you are not being manipulated by the machine!
What about Steem
Ok, I hear you ;)
What I would like to see during the growth phases of Steem are buy-backs in Steem from the owners using money earned via monetizing our platform. We have an amazing, talented audience on Steem, probably the best I have ever experienced on any site!
When I used to go on Facebook, Twitter, and Youtube I put up with ads because I wanted to see or hear the content.
The only difference is that at no time did I make one iota from it!!
I fear if the value of Steem continues to decline, that many of our talented writers may leave and many traders may stop trading Steem. It's so early and I see how easy it is to fix, lets not let a few advertisements stop us all from earning to have fun.
Lets all make this site the Biggest and Strongest social media site ever! Lets all be able to say, "I was on STEEMIT first" to our Grandchildren!