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Investors want to know what firms are spending more than earning

The hope is that their stance on big expenditures, like real estate or major machinery, will offer clarity into how they see the economy.
The article from Fortune discusses how investors are increasingly scrutinizing companies that spend more than they earn, a situation often referred to as "cash burn." This heightened scrutiny comes in the wake of high-profile cases like WeWork, where excessive spending led to significant investor losses. Investors are now demanding more transparency and detailed financial metrics to better understand a company's burn rate and path to profitability. The article highlights that while some investors are willing to tolerate high burn rates for startups with strong growth potential, there is a growing consensus that companies, especially those in later stages, need to demonstrate a clear strategy for achieving sustainable profitability. This shift in investor sentiment is prompting companies to be more cautious with their spending and more communicative about their financial health.

Read the Full Fortune Article at:
[ https://fortune.com/article/investors-want-to-know-what-firms-are-spending-more-than-earning/ ]