On: The Basque Country’s Mondragón Corporation is the largest industrial co-op

[dbingham]

But the employees don't own a controlling share. For it to be a worker cooperative it really needs to be entirely owned and governed by the people working there.

[jandrewrogers → dbingham]

The tradeoff is that requiring all shares be worker-owned devalues the shares owned by workers, due to massively reduced liquidity. This situation does not necessarily benefit the workers since they have an interest in maximizing the value of their share.

[bboygravity → jandrewrogers]

How does reduced liquidity equal lower share value?

Makes no sense to me.

Case in point example: SpaceX shares are very illiquid but also very very much up since SpaceX was founded.

[sokoloff → bboygravity]

Suppose I own 0.01% of the company I work at. If that company is publicly traded, I can sell those shares to anyone.

If that company is a co-op in which only employees are allowed to own shares, the only people I can sell my shares to are other employees.

In general, more willing buyers (who in turn know they can they sell those shares unrestricted in the future to any buyer), increases the people willing to bid on those shares at any given moment in time. (It’s the same basic reason that you’d rather have $100 in cash than $100 gift card for Starbucks.)

[lsaferite → sokoloff]

Are you even allowed to buy/sell shares in an employee owned co-op? I understood that share ownership was part of employment with the company. It entitles you to a share in the profits and a share in the decision making, but I didn't think it was a tradable instrument itself.

[pineaux → lsaferite]

This is the answer to all the above. These shares give you a right to part of the profit, but cannot be sold.

[sokoloff → pineaux]

What does it mean to own something that you cannot sell/assign?

That sounds like plain old profit sharing, not ownership.

[dbingham → sokoloff]

Ownership in the sense of governance, not of property.

Worker cooperatives are organizations that are governed by their workers for their workers, not owned as property to be traded or sold.

[nyssos → bboygravity]

> How does reduced liquidity equal lower share value?

1: Lower liquidity usually goes hand in hand with higher transaction costs, which means a bigger gap between how much the buyer pays and how much the seller walks away with.

2: Time value of money: Suppose some liquid asset can be exchanged for $X right now, and an otherwise equivalent illiquid asset can be exchanged for $X by, let's say, a month from now. $X today is more valuable than $X in a month, so no one is going to buy the illiquid asset today for $X if they could get the liquid one instead.

[xhkkffbf → dbingham]

How do you handle companies like AMZN where Jeff Bezos still plays a role. Yes, he seems to be busy doing other things but he does seem to have a role. And the founders at all of these companies are still doing things. Even Bill Gates has some kind of role, right?