this post was submitted on 24 Feb 2024
324 points (97.6% liked)
Technology
59534 readers
3195 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each another!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
Approved Bots
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Wall Street doesn't care about profitability, they only care about growth.
They should be worried about how much of their 'growth' is bots.
They care now that interest rates have increased. That’s kinda what the whole “enshitification” and layoffs are all about. Tech companies desperately scrambling to make a profit.
Profitability is beginning to matter more. 5.25% Federal Funds rate, and a Prime-Rate of like 8.5%, means that it costs 8.5% for businesses to borrow money now.
So that means that if a business borrows at 8.5%, they must grow by 8.5% to just stay even with interest rates and the cost of borrowing money. Because a lot of these "growth" strategies involve losing money for years-and-years, you have to factor in the costs of those losses as well.
When Federal Funds Rate was 0.25%, no one cared about the cost of money or the cost of loans. Today, Wall Street cares, and you can see it in all the stock movements. The less-profitable companies have been getting hammered.
Nope that was true when interest rates were low.
Now they care about the bottom line.
It can change again.