> But these companies are so big now that it would hurt someone's stock, 401k, and economy as a whole.
I'd think a "corporate death penalty" as a kind of creative destruction. I'm sure demise of Radio Shack hurt someone's stock stock or 401k, so that's tolerable. If it's not, I suppose part of the policy could be to reissue and return stock to certified "unsophisticated" investors (e.g. index funds open to the public and people with net worth below some middle-class cutoff). That reissued stock would still be valuable, since likely few of the company's fundamentals would have changed.
I also don't think such a thing would hurt the "economy as a whole" beyond a short-term blip, unless the company ceases to be a going concern. You'd only we wiping out the stockholders, it'd still service its customers, make debt payments, etc.
I'd think a "corporate death penalty" as a kind of creative destruction. I'm sure demise of Radio Shack hurt someone's stock stock or 401k, so that's tolerable. If it's not, I suppose part of the policy could be to reissue and return stock to certified "unsophisticated" investors (e.g. index funds open to the public and people with net worth below some middle-class cutoff). That reissued stock would still be valuable, since likely few of the company's fundamentals would have changed.
I also don't think such a thing would hurt the "economy as a whole" beyond a short-term blip, unless the company ceases to be a going concern. You'd only we wiping out the stockholders, it'd still service its customers, make debt payments, etc.