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Mercenary Capital

Mercenary Capital - is a type of self-serving capital provided by investors as a means to profit from short-term incentive programs. Mercenary capital is often used to buy shares of a company that is about to be taken over. The goal is to make a quick profit when the takeover is completed.

Mercenary capital can also be used to speculate on the future price of a commodity. For example, investors may buy shares of a company that owns a gold mine when the price of gold is low. If the price of gold goes up, the investors can sell their shares for a profit.

Mercenary capital is often criticized because it can lead to short-term thinking and bad decision-making. For example, a company that is considering a long-term investment may choose not to do so if it will not immediately increase the value of the company's stock. This can lead to a company missing out on important opportunities for growth.

Critics also argue that mercenary capital creates a lot of uncertainty and can lead to market instability. For example, if a large number of investors are speculating on the future price of a commodity, they may all try to sell their shares at the same time if the price starts to go down. This can cause the price to drop sharply, which can lead to a financial crisis.



27 Dec 2023

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