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Companies behind non-dividend paying stocks can own assets and make profits and shareholders own these assets and profits. The value of these assets and profits
by mixedbit 4y ago
Companies behind non-dividend paying stocks can own assets and make profits and shareholders own these assets and profits. The value of these assets and profits somehow anchor the stock price, the price can go significantly below reasonable valuation in short time frames, but in a long run market will correct cases where you can buy 100$ worth of assets for 50$.
(also companies often use the profits to buy back own stocks, in which case the price goes up without any people buying)
- spaceman_2020 4y agoUber has no cars Airbnb has no hotels If these companies don't generate profits, then what assets are shareholders holding onto? The app? The algorithm? The design? Then that's just IP. And if the asset is just the IP, how is that different from any blockchain dApp, which is just code? I don't think you're making the point you think you're making. An unprofitable SaaS startup has no assets besides its code either.
- mixedbit 4y agoFrom a set of companies that do not pay dividends, companies that do not generate profits are a small subset. Many companies in the SP500 index do not pay dividends, but one of the conditions of inclusion in the SP500 index is for a company to generate profits. Unprofitable companies may well be very similar to any blockchain app, although you have more signals to analyze their future profitability potential.