> Wouldn't the investment funds be motivated to avoid investing in these companies, the same way they are motivated to avoid investing in companies likely to crash?
But they aren't. A small probability of huge return makes likely crash a non-problem.
However this deterrent effect is unfortunately conditional on the full risk of the outcome being apparent in advance to investors and indeed investees. I fear that often it is not, as in this 3M case. This boils down to our drive for progress leading to employing new technology beyond our ability to evaluate its risk, as e.g. currently with "AI". Deterrence of that cannot be acheived at the corporate level. It is a societal problem.
But they aren't. A small probability of huge return makes likely crash a non-problem.