Sure. Might be easier if I use specific companies and people. If Snapchat ends up being wildly profitable, Evan Spiegel can't simply spend those profits, becau

Sure. Might be easier if I use specific companies and people. If Snapchat ends up being wildly profitable, Evan Spiegel can't simply spend those profits, because they belong to Snapchat. If he wants to spend those profits, his choices are to either collect a dividend from the stock he owns, have Snapchat buy back his shares, or sell the right to participate in those future events on the open market. Or with a super simplified analogy: Snapchat is a box with some cash and the operating business inside it. When Snapchat makes money, it means there's more cash in the box. If someone wants to buy the box, they pay shareholders for it, and if there's more cash in the box the buyer is going to pay more for the box. Paying a dividend is taking cash out of the box and handing it to shareholders. The value of the cash plus the rest of the box is the same whether the box gives money to the owners directly (through a dividend) or indirectly (by getting bought for more money). So really, dividends don't matter. If the company decides not to pay a dividend, it turns $X of stock + $Y of dividend into $X + $Y of stock.