this post was submitted on 19 Feb 2024
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Investing... it's providing them money

Companies only get money from stocks when they issue new shares, other than that, you buying a stock has no impact. If you spend $1000 on shares, maybe the stock price goes up by a penny or so, but the company gets none of that $1000 because you're buying from another investor.

So no, it's not giving them money in pretty much any sense at all unless you're making a deal directly with the board to issue new stock at a certain price.

If I come to you with my meth business, a proven track record, and a high potential rate of return and I just want money to help expand, you would consider that a good business?

That's completely separate from public shares.

If I buy a public share of your meth business, that doesn't give you any new capital at all, it only gives capital to the seller. That sale has an infinitesimally small impact on the share price, so you'd see pretty much no impact unless I'm buying a very large quantity. My share is also likely not a voting share, so I have no say in how the company is run.

It's closer to buying second hand products. It provides no direct revenue to the original manufacturer, though it does slightly increase demand for their products, which could mean they might make a little more money in the future, though most likely it's not going to change anything at all. The main difference is that, instead of products, it's a small piece of the company, so the market value should reflect the value of the company, not the market value of a single product.

Let's say your meth company doubles in value because you're a real Walter White. I could then sell my share and use the proceeds to buy ad space to oppose meth. The purchase and sale has no impact on your business, but my ad space absolutely does.

So me buying shares of an unethical company does pretty much nothing to their bottom line. If I bought a single product from them instead, it would have a much larger impact than spending the same amount on a share of their stock. So the best thing you can do is invest wisely (i.e. chase returns) to grow your money and spend your gains on ethical products.

losing the money invested is absolutely a risk you take when investing

Absolutely! That's why I shouldn't buy Enron stock or whatever. Due diligence is absolutely important, but the due diligence should be on future growth potential (well, market sentiment about long term growth, actual growth is less important), not in ethics. If a company is doing illegal stuff, that's a risk to long term growth since the government will likely step in.

Invest to grow your capital, and spend ethically. There's something cathartic about making a bunch of money investing in oil and then buying green products with the proceeds.