3 ms·
What shell game? I can buy a share of Microsoft for ~$25 and then I get a vote in how the company is run and receive a percentage of the profits. Microsoft in t
by dschobel 16y ago
What shell game? I can buy a share of Microsoft for ~$25 and then I get a vote in how the company is run and receive a percentage of the profits. Microsoft in turn gets to use the equity to build bigger and better things. Seems pretty fair to me.
- mdda 16y agoIt's not quite so simple. The $25 you spend on the share isn't used by Microsoft : It's used to pay to the seller of the share. Until Microsoft needs to issue more shares (or repurchase them), the value of the stock is not meaningful (to the company). Of course, people with stock options care about the value of the stock. In the same way, it's actually bad outcome for a company to have their stock jump up after the IPO : it means that the company missed the opportunity to raise even more money (for the same amount of dilution for existing holders).
- bcl 16y agohttp://www.fool.com/investing/general/2010/09/17/5-companies-that-doubled-earnings-while-their-stoc.aspx http://www.fool.com/investing/general/2010/09/17/5-companies... How's MSFT doing for you these days? "In 2004, Microsoft earned $0.75 a share. Over the past year, it pulled down $2.10 per share. That's 18.7% earnings growth per year. Extraordinary. Yet Microsoft shares trade lower today than they did for all of 2004. Dividends provided some return, but shareholders have essentially been handed a donut for a company that's blown the lights out on earnings."
- deleted 16y ago[deleted]