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> There is economic value in a piece of equity in google. It doesn't entitle you to profits, it doesn't entitle you to assets (except in bankruptcy), you can't

> There is economic value in a piece of equity in google. It doesn't entitle you to profits, it doesn't entitle you to assets (except in bankruptcy), you can't eat it, and it's only worth what other people will pay you for it. Unlike a rothko, I can't hang it in my living room. Where's the value?

thepasswordis 4y ago
Well you see at some point in the future I can hope to sell it to somebody else for more money than I paid!
JumpCrisscross 4y ago
> doesn't entitle you to assets (except in bankruptcy) Of course it does. When the company is sold, you are entitled to the proceeds. M&A is the ultimate enforcer of equity value.
- everfree 4y ago
  > When the company is sold, you are entitled to the proceeds. So in other words, your share is worth what other people will pay you for it. I already said that. A whole-company sale is just an event where all shares are bought at once.
deleted 4y ago
[deleted]
__jem 4y ago
It absolutely does entitle you to profits, either in the form of dividends or stock buybacks.
- everfree 4y ago
  If Google decided to keep their profits on their balance sheet instead of paying dividends or doing buybacks, what would my recourse be? I can't just vote in a dividend, because founders Larry and Sergey control 51% of the voting power. Shares don't entitle you to profits at all.
  - __jem 4y ago
    Just because I can't walk into Google headquarters and demand a dividend doesn't mean that I don't still own some portion of those profits. Yes, finance is complicated, but there's no corporate board on this planet that would accept indefinite stockpiling of cash, which is why buybacks happen, including for Google!
    - everfree 4y ago
      > Just because I can't walk into Google headquarters and demand a dividend doesn't mean that I don't still own some portion of those profits. "Own" in what sense? You can't request them, you can't even vote for them to be spent in a certain way, and there's no guarantee that they'll be paid to you. Someone once said this about NFTs but it also applies to the idea of Google stock as "ownership of profits" - it's like having a wife that you never seem to have time with, but you don't have to worry because you have the paperwork which says you are married to her. > there's no corporate board on this planet that would accept indefinite stockpiling of cash, which is why buybacks happen, including for Google! The board is appointed by voters. Those voters are Sergey and Larry. Sergey and Larry determine whether buybacks happen.
      - __jem 4y ago
        Board members have a fiduciary responsibility -- there is legal recourse here by minority shareholders even if that's not "realistic" for your average shareholder.
incone123 4y ago
Nothing prevents you hanging share certificates in your living room except your personal taste.
chrisgd 4y ago
You have a vote
_jal 4y ago
> Where's the value? The value is partly in Google, the corporation. Google is effectively a bundle of legal contracts, shared knowledge and habits that together tend to spit out money. The rest of the value is in society. Laws, practices and habits mean that sliver of ownership tends to rise if Google works well, fall if not. If you prefer to store your savings in whatevercoins, I hope you enjoy whatever you end up with on the other side. But please don't get back to me about it, I am utterly fucking sick of hearing crypto pitches.
ghaff 4y ago
The classic finance answer--which is indeed perhaps zero in the case of Alphabet--is that the value of a stock is the net present value of its dividend payouts. Buybacks complicate that simple formula as do a lot of other things but, in theory, a share of stock does entitle you to a share of the profits of a company.
mkipper 4y ago
If Google stock were really worthless, someone could buy all of it for pennies and do whatever they want with the company. Owning and controlling a company with $80B yearly profits isn’t worth anything to you? A single Google share isn’t really worth anything on its own. But its value is tied to the collective value of _all_ Google shares, which _are_ worth something.
- everfree 4y ago
  > If Google stock were really worthless, someone could buy all of it for pennies Nobody is disputing that it has market value. My argument is that it has much less intrinsic value than some people would like to believe. > A single Google share isn’t really worth anything on its own. But its value is tied to the collective value of _all_ Google shares, which _are_ worth something. Not really, unless there's some non-zero chance that Alphabet will be bought out. By my understanding, that chance is pretty close to zero. Am I wrong?

thepasswordis 4y ago

Well you see at some point in the future I can hope to sell it to somebody else for more money than I paid!

JumpCrisscross 4y ago

> doesn't entitle you to assets (except in bankruptcy) Of course it does. When the company is sold, you are entitled to the proceeds. M&A is the ultimate enforcer of equity value.

everfree 4y ago
> When the company is sold, you are entitled to the proceeds. So in other words, your share is worth what other people will pay you for it. I already said that. A whole-company sale is just an event where all shares are bought at once.

deleted 4y ago

[deleted]

__jem 4y ago

It absolutely does entitle you to profits, either in the form of dividends or stock buybacks.

everfree 4y ago
If Google decided to keep their profits on their balance sheet instead of paying dividends or doing buybacks, what would my recourse be? I can't just vote in a dividend, because founders Larry and Sergey control 51% of the voting power. Shares don't entitle you to profits at all.
- __jem 4y ago
  Just because I can't walk into Google headquarters and demand a dividend doesn't mean that I don't still own some portion of those profits. Yes, finance is complicated, but there's no corporate board on this planet that would accept indefinite stockpiling of cash, which is why buybacks happen, including for Google!
  - everfree 4y ago
    > Just because I can't walk into Google headquarters and demand a dividend doesn't mean that I don't still own some portion of those profits. "Own" in what sense? You can't request them, you can't even vote for them to be spent in a certain way, and there's no guarantee that they'll be paid to you. Someone once said this about NFTs but it also applies to the idea of Google stock as "ownership of profits" - it's like having a wife that you never seem to have time with, but you don't have to worry because you have the paperwork which says you are married to her. > there's no corporate board on this planet that would accept indefinite stockpiling of cash, which is why buybacks happen, including for Google! The board is appointed by voters. Those voters are Sergey and Larry. Sergey and Larry determine whether buybacks happen.
    - __jem 4y ago
      Board members have a fiduciary responsibility -- there is legal recourse here by minority shareholders even if that's not "realistic" for your average shareholder.

incone123 4y ago

Nothing prevents you hanging share certificates in your living room except your personal taste.

chrisgd 4y ago

You have a vote

_jal 4y ago

> Where's the value? The value is partly in Google, the corporation. Google is effectively a bundle of legal contracts, shared knowledge and habits that together tend to spit out money. The rest of the value is in society. Laws, practices and habits mean that sliver of ownership tends to rise if Google works well, fall if not. If you prefer to store your savings in whatevercoins, I hope you enjoy whatever you end up with on the other side. But please don't get back to me about it, I am utterly fucking sick of hearing crypto pitches.

ghaff 4y ago

The classic finance answer--which is indeed perhaps zero in the case of Alphabet--is that the value of a stock is the net present value of its dividend payouts. Buybacks complicate that simple formula as do a lot of other things but, in theory, a share of stock does entitle you to a share of the profits of a company.

mkipper 4y ago

If Google stock were really worthless, someone could buy all of it for pennies and do whatever they want with the company. Owning and controlling a company with $80B yearly profits isn’t worth anything to you? A single Google share isn’t really worth anything on its own. But its value is tied to the collective value of _all_ Google shares, which _are_ worth something.

everfree 4y ago
> If Google stock were really worthless, someone could buy all of it for pennies Nobody is disputing that it has market value. My argument is that it has much less intrinsic value than some people would like to believe. > A single Google share isn’t really worth anything on its own. But its value is tied to the collective value of _all_ Google shares, which _are_ worth something. Not really, unless there's some non-zero chance that Alphabet will be bought out. By my understanding, that chance is pretty close to zero. Am I wrong?