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you have less power but over a more valuable company that's how it works
by redwood 11y ago
you have less power but over a more valuable company that's how it works
- maxerickson 11y agoI think for voting power in large companies, 200 shares and 2000 shares compare as approximately equal (probably 20,000 too).
- mattmaroon 11y agoThere are, however, often institutional investors who own meaningful amounts of a conpany's shares.
- maxerickson 11y agoI don't see how that is a however, my point was that there is some threshold below which an investor is basically irrelevant when it comes to control of the company, not something about whether there are large holders of shares. As a small investor, this usefully informs reasoning, because you are not buying control of the company, you are giving control over your investment to the people who do have meaningful amounts of stock. (For instance, when Google IPO'd, they made sure that everybody buying stock in the IPO was irrelevant to control of the company by issuing a different class of shares to the founders/insiders)
- t0mbstone 11y agoBut if a company increases in value, shouldn't the value of your shares go up? I mean, isn't that the whole point of owning a percentage of a company?
- Renevith 11y agoThe increase in value only came from the new $500m in cash. That cash didn't come from the company's operations and it didn't come from you, so there's no reason to think that your shares would increase (or decrease) in value.
- redwood 11y agoNo because each share is worth a proportionally less chunk of the company. .. but don't get me wrong: speculators could certainly assume that it should mean that the stock price goes up and longer term it could enable the company to grow faster and in the end that could also cause its value per share to go up but immediately it doesn't really make sense for it to