3 ms·
Re-investment for the long term is government subsidized growth? That's a new one. I have to disagree pretty strongly that this is a distortion of anything, i
by parasubvert 7y ago
Re-investment for the long term is government subsidized growth? That's a new one. I have to disagree pretty strongly that this is a distortion of anything, it's capitalism 101 in the face of a progressive corporate profit tax. If the US government wants to tax all business activity regardless of profit, they can do what the rest of the Western world has done and introduce a VAT.
Amazon is otherwise doing a masterful exercise of long term planning and competition.
- nine_k 7y agoThey are financed by investors initially, and are not paying back in cash. They re-invest their profits, in other words, keep them to themselves. The investors are paid back by the rising stock, which means by more investors who want to buy the stock and raise the price by their demand. This is indeed brilliant, and overpowers any org that needs to return part of its profits back to investors, lenders, etc.
- parasubvert 7y agoNot paying a dividend in favour of being a growth stock is an old play... Microsoft famously took 28 years to begin paying a dividend (2003).