If the total worldwide market cap of a company exceeds 1.0% of the total US GDP for a given year, then I think they should be required to liquidate all preferred stocks, preferably trading them 1-for-1 with the regular stocks, although I would also concede that it might be fair to trade them for an equal value.
At US GDP for 2020 being just under $21T, this would mean that any company with a global market cap of slightly more than $200B would be affected — $209.63B, to be more exact.
If you want to shift the point at which this rule is applied, then adjust the percentage, but I think you want it to be tied to something that will vary and adjust in the future, to account for inflation, etc….
And I suggest global market cap as the comparison base, because some companies have a habit of using multiple shell companies in a wide variety of foreign countries, in order to try and hide their revenue and protect it from governmental taxes. I think we want to account for those kinds of shenanigans from the start.
Anyway, it’s just an idea. But I hope this general concept does take off.
The page at https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location... says that the total US GDP for 2020 was almost $21T dollars. Specifically, $20,936B. The page at https://www.macrotrends.net/stocks/charts/FB/facebook/market... shows that the current market cap for Facebook is about $967B, but in 2020 it peaked just over $600B. Let’s use the 2020 numbers for illustration.
If the total worldwide market cap of a company exceeds 1.0% of the total US GDP for a given year, then I think they should be required to liquidate all preferred stocks, preferably trading them 1-for-1 with the regular stocks, although I would also concede that it might be fair to trade them for an equal value.
At US GDP for 2020 being just under $21T, this would mean that any company with a global market cap of slightly more than $200B would be affected — $209.63B, to be more exact.
If you want to shift the point at which this rule is applied, then adjust the percentage, but I think you want it to be tied to something that will vary and adjust in the future, to account for inflation, etc….
And I suggest global market cap as the comparison base, because some companies have a habit of using multiple shell companies in a wide variety of foreign countries, in order to try and hide their revenue and protect it from governmental taxes. I think we want to account for those kinds of shenanigans from the start.
Anyway, it’s just an idea. But I hope this general concept does take off.