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Here’s something to consider: Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the prev

by jl2718 5y ago

Here’s something to consider: Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. What about the last person that will ever hold that share? How will they profit from owning it?

porb121 5y ago
> Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. this is....not how stocks work
pyrale 5y ago
> What about the last person that will ever hold that share? How will they profit from owning it? They will have voting rights on the board and perceive dividends from one of the most successful companies in recent history? Even if the company stopped its activities today, liquidating its assets: land, patents, infrastructure, contracts, data, etc. would bar the stock from going to zero.
imtringued 5y ago
We have hundreds of articles complaining about companies doing stock buy backs... how companies value their shareholders more than their employees. There is even an internet myth that companies have to be maximally profitable if they don't want to be in legal trouble versus their shareholders. It's really quite simple. Companies grow and make profits. They issue dividends or do stock buybacks and return excess cash to investors. The market might be overvalued but bubbles burst eventually.
lottin 5y ago
> Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. This is not the reason AMZN is worth something at all. The reason is because 1. assets > liabilities and 2. it's a business that generates a stream of net income. And this is independent from what the stock market thinks AMZN is worth. For example, if the stock market thought AMZN was worth zero, you could buy the entire company for nothing and liquidate it for a profit, or keep it running and pocket the business profits, so it would still be worth something.

by jl2718 5y ago

porb121 5y ago

> Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. this is....not how stocks work

pyrale 5y ago

> What about the last person that will ever hold that share? How will they profit from owning it? They will have voting rights on the board and perceive dividends from one of the most successful companies in recent history? Even if the company stopped its activities today, liquidating its assets: land, patents, infrastructure, contracts, data, etc. would bar the stock from going to zero.

imtringued 5y ago

We have hundreds of articles complaining about companies doing stock buy backs... how companies value their shareholders more than their employees. There is even an internet myth that companies have to be maximally profitable if they don't want to be in legal trouble versus their shareholders. It's really quite simple. Companies grow and make profits. They issue dividends or do stock buybacks and return excess cash to investors. The market might be overvalued but bubbles burst eventually.

lottin 5y ago

> Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. This is not the reason AMZN is worth something at all. The reason is because 1. assets > liabilities and 2. it's a business that generates a stream of net income. And this is independent from what the stock market thinks AMZN is worth. For example, if the stock market thought AMZN was worth zero, you could buy the entire company for nothing and liquidate it for a profit, or keep it running and pocket the business profits, so it would still be worth something.