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Question about price discovery and competition in american capitalism (feddit.dk)

submitted 2 days ago by Marand@feddit.dk to c/asklemmy@lemmy.ml

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I've been listening to Aquired recently (podcast about company origin stories) and when talking about privately owned companies (for instance, the recently Mars Inc. episode) they always do back of napkin estimated earnings because the company is private, which apparantly means they don't have to disclose earnings.

But in my country, Denmark, every company earning above 50.000 DKK (=7853 USD) has to disclose earnings. I believe this is for price discovery purposes, so that other entrepreneurs can see how much margin companies have and try to compete if they earn too much money, which is an important part of capitalism, right?

How come this is not required in USA, the "home" of capitalism? If I'm not mistaken of course, my apologies if so.

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[–] HobbitFoot@thelemmy.club 5 points 2 days ago

Most countries don't require it for privately traded companies.

The standard for reporting for private companies is usually far lower than publicly traded companies because it is expected that people with enough money to invest in financial companies have enough money to invest in their own auditing.

Also, as you pointed out, there is value in that data. It appears to be that companies would rather keep their data private than look at others' public data.