I'm not a business person so I'm mostly using my extrecatory organ for vocalization here, but...
One way to interpret this is that people are betting that losing companies are spending that money acquiring a resource that they can use to generate profit later. The obvious example is growing a giant userbase that will then stick with your product over time. Or it could be building up a bunch of infrastructure to reach a neccesary economy of scale. Hell, it could just be straight up paying lobbyists to buy politicians and do regulatory capture.
The implication from all of this, then, is that these businesses are directly aiming for and/or creating inefficient markets. In an efficient market, it's easy for participants to enter and exit, startup costs are low, and consumers can easily switch products. That means there should be nothing a losing company can buy today that would prevent a future competitor from eating their lunch a few years from now.
The fact that the market rewards losing company shows that there are things companies can buy now that stifle competition and reduce market efficiency in the future. These companies are spending money today to produce a worse market for consumers a few years from now.
That doesn't sound like something we should be thrilled about.
One way to interpret this is that people are betting that losing companies are spending that money acquiring a resource that they can use to generate profit later. The obvious example is growing a giant userbase that will then stick with your product over time. Or it could be building up a bunch of infrastructure to reach a neccesary economy of scale. Hell, it could just be straight up paying lobbyists to buy politicians and do regulatory capture.
The implication from all of this, then, is that these businesses are directly aiming for and/or creating inefficient markets. In an efficient market, it's easy for participants to enter and exit, startup costs are low, and consumers can easily switch products. That means there should be nothing a losing company can buy today that would prevent a future competitor from eating their lunch a few years from now.
The fact that the market rewards losing company shows that there are things companies can buy now that stifle competition and reduce market efficiency in the future. These companies are spending money today to produce a worse market for consumers a few years from now.
That doesn't sound like something we should be thrilled about.