In the context you are using it, "profit" has a very specific meaning that's a little incongruent with what you're trying to say.
In that context, "profit" is the idea that earnings above cost are distributed to shareholders. The stock market mechanism then guarantees that companies unconcerned with that sort of profit will see someone gobble up the shares once they dip low enough (and they will), install a new board of directors, and dismantle the company for parts or some other endeavor-ending inevitability.
From a stock price perspective, it will just be too tempting.
Nonprofits are disallowed from distributing earnings above cost or any other profit mechanism. While they might have their own set of pathologies, they're immune to the one I've described, to the best of my understanding.
Isn’t it possible to maintain ownership among founders and initial investors and maintain a minority share (<50%) of public stock? Although there’s nothing wrong with staying entirely private either.
It seems almost impossible to run a public company without having the place be taken over by bean counters these days.
> The stock market mechanism then guarantees that companies unconcerned with that sort of profit will see someone gobble up the shares once they dip low enough (and they will), install a new board of directors, and dismantle the company for parts or some other endeavor-ending inevitability.
There are all sorts of ways to defend against a hostile takeover like this. I already mentioned Zuckerberg having majority control of the voting shares despite the company being public. There was also the attempted takeover of Netflix a decade ago that was prevented with a poison pill to issue more shares.
In that context, "profit" is the idea that earnings above cost are distributed to shareholders. The stock market mechanism then guarantees that companies unconcerned with that sort of profit will see someone gobble up the shares once they dip low enough (and they will), install a new board of directors, and dismantle the company for parts or some other endeavor-ending inevitability.
From a stock price perspective, it will just be too tempting.
Nonprofits are disallowed from distributing earnings above cost or any other profit mechanism. While they might have their own set of pathologies, they're immune to the one I've described, to the best of my understanding.