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What's supposed to happen is that profitable companies start paying dividends to their shareholders. If you're getting dividends, then you don't mind if the va

What's supposed to happen is that profitable companies start paying dividends to their shareholders. If you're getting dividends, then you don't mind if the value of your shares is staying flat or even dropping a little. The original purpose of owning shares in a company wasn't only that the value of the shares themselves would increase, but that they'd pay dividends so shareholders can make a profit over the life of a company. As far as I know, Netflix shares, much like shares in many other tech companies, do not pay any dividend. Perhaps it's time they begin.

lotsofpulp 5y ago
> The original purpose of owning shares in a company wasn't only that the value of the shares themselves would increase, but that they'd pay dividends so shareholders can make a profit over the life of a company. I do not want dividends if I think the business can invest the money with a higher probability of better ROI than I can. If shareholders want dividends, they can vote for them.
- mcphage 5y ago
  > I do not want dividends if I think the business can invest the money with a higher probability of better ROI than I can. A better ROI to whom—itself, or to you? Do you own Netflix stock to make money for yourself, or for Netflix to make money for itself?
  - lotsofpulp 5y ago
    To me, of course. But Netflix earning more money for itself is the same as Netflix stock price increasing is the same as the Netflix’s owner’s ROI.
    - mcphage 5y ago
      Clearly not the same, since a dividend would increase your ROI, but is not Netflix earning more money for itself.
      - lotsofpulp 5y ago
        For a liquid asset, ROI should be the same (excluding taxes) either with or without dividend: https://www.investopedia.com/articles/stocks/07/ex_dividend.asp https://www.investopedia.com/articles/stocks/07/ex_dividend.... With a dividend, you have to pay taxes now. Without the dividend, the stock price remains higher so you sit on higher unrealized gains. But assuming you can sell it anytime (it is liquid), the ROI is still there without the dividend.
- Ekaros 5y ago
  If they were able to do, shouldn't they instead take debt specially when it is cheap now. Invest that and give you the dividends on both?
  - lotsofpulp 5y ago
    Borrowing is not free. Other owners of the company may not have the same cash flow objectives. If you have enough votes on the board to make that the objective, then it is possible, but longer term stakeholders will probably object to being saddled with debt so some can cash out now.
anecd0te 5y ago
Netflix (like many businesses) use stock buybacks instead of dividends.

lotsofpulp 5y ago

> The original purpose of owning shares in a company wasn't only that the value of the shares themselves would increase, but that they'd pay dividends so shareholders can make a profit over the life of a company. I do not want dividends if I think the business can invest the money with a higher probability of better ROI than I can. If shareholders want dividends, they can vote for them.

mcphage 5y ago
> I do not want dividends if I think the business can invest the money with a higher probability of better ROI than I can. A better ROI to whom—itself, or to you? Do you own Netflix stock to make money for yourself, or for Netflix to make money for itself?
- lotsofpulp 5y ago
  To me, of course. But Netflix earning more money for itself is the same as Netflix stock price increasing is the same as the Netflix’s owner’s ROI.
  - mcphage 5y ago
    Clearly not the same, since a dividend would increase your ROI, but is not Netflix earning more money for itself.
    - lotsofpulp 5y ago
      For a liquid asset, ROI should be the same (excluding taxes) either with or without dividend: https://www.investopedia.com/articles/stocks/07/ex_dividend.asp https://www.investopedia.com/articles/stocks/07/ex_dividend.... With a dividend, you have to pay taxes now. Without the dividend, the stock price remains higher so you sit on higher unrealized gains. But assuming you can sell it anytime (it is liquid), the ROI is still there without the dividend.
Ekaros 5y ago
If they were able to do, shouldn't they instead take debt specially when it is cheap now. Invest that and give you the dividends on both?
- lotsofpulp 5y ago
  Borrowing is not free. Other owners of the company may not have the same cash flow objectives. If you have enough votes on the board to make that the objective, then it is possible, but longer term stakeholders will probably object to being saddled with debt so some can cash out now.

anecd0te 5y ago

Netflix (like many businesses) use stock buybacks instead of dividends.