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The structure of the company gives you the right to future dividends at the same rate as other classes of stock. So as long as they think they're creating some
by jegutman 11y ago
The structure of the company gives you the right to future dividends at the same rate as other classes of stock. So as long as they think they're creating something of value and the marketplace does you own an equal equity share of that entity.
Google finally paid a dividend (although a one-time dividend) and also announced a stock buyback so these companies may start returning capital. As of right now facebook thinks that capital is best put to use inside the company. I think there's a pretty good chance they're right on that.
Bottom line, you have the same rights to payments per share as Zuckerberg. Also technically Zuckerberg will at some point (might be 30-50 years from now) start divesting his shares and at some point your stock might be valuable for someone who does want to change the structure of the company or take it private.
Another defense is "internal arbitrage". So the company has value, and a different owner might decide to sell off assets or pay dividends to realize that value. But even without the stock changing hands, let's say it started trading at $20 a share. This would encourage Zuckerberg to work with a PE firm to take the company private again.
When stocks trade near, at, or above fair value you wont' really see any of these things happen, but if they started trading way below fair value, you would.
- LoSboccacc 11y agoIsn't there also a difference between voting stock, non voting and privileged? Just asking since it might be different than my country and seems you rolled them all togheter.
- michaelt 11y agoBottom line, you have the same rights to payments per share as Zuckerberg. Also technically Zuckerberg will at some point (might be 30-50 years from now) start divesting his shares Why would he issue a dividend, where he has to share the money with other shareholders, when he could approve himself a bonus, and not have to share the money with anyone?
- aianus 11y agoBonuses are fully taxed as income, dividends have a much preferable tax rate.
- hyperpape 11y agoI'm not sure if issuing himself a sufficiently large bonus to compete with the value of his shares is feasible. And giving yourself a billion dollar bonus probably does not inspire confidence in the stock markets. He'd probably end up losing as much in stock value as he gained in the bonus.