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> If money were never returned to shareholders, the market would be a literal ponzi scheme. Not really. Dividends are how investors have historically gotten a
by msandford 11y ago
> If money were never returned to shareholders, the market would be a literal ponzi scheme.
Not really. Dividends are how investors have historically gotten a return.
Now that hasn't been much of a thing, especially not with tech companies for the last 20 years, but there are still plenty of stocks you can buy that pay dividends.
- Mikeb85 11y ago> Not really. Dividends are how investors have historically gotten a return. Both are. Either way, investors demand some sort of compensation for their investment once the company matures. If this didn't happen, there would be no incentive to invest. > Now that hasn't been much of a thing, especially not with tech companies for the last 20 years And this is a problem, although once tech companies mature they generally do return money to shareholders in one way or another. Microsoft, IBM and Apple pay dividends, Dell bought out shareholders, for example.
- deleted 11y ago[deleted]
- xadhominemx 11y agoThe only major difference between buybacks and dividends is how they are taxed. Many companies will allocate capital shareholders and decide on special dividends vs buybacks on the basis of liquidity and valuation.