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> "returning money to the shareholders" is ultimately what companies are for That's what shareholders want you to think. But societally and economically compan
by scotty79 3y ago
> "returning money to the shareholders" is ultimately what companies are for
That's what shareholders want you to think. But societally and economically companies are mostly for everything else. If no company ever paid a single dividend or never bought back any of its stock nothing bad would happen. There are a lot of companies doing exactly that.
But if companies stopped doing everything else they do that they are supposedly not for, the economy would end.
- mypastself 3y agoExcept that even then, an investor can sell their shares. If they couldn’t, no company would ever be able to raise money in a public offering.
- fiprofessor 3y agoWho would invest in or create a company that would never pay a dividend and never bought back its stock? How would shareholders ever yield gains from their investment? Short of some entity buying all stock and taking the company private (to then withdraw profits), there would be no way to return profits to shareholders. The companies currently not doing those things are in a growth phase, with the expectation that in the future they probably will be issuing dividends/buybacks.
- Aspos 3y agoThose who benefit from the company exist would invest in it: state, employees, clients.
- Eisenstein 3y ago> The companies currently not doing those things are in a growth phase, with the expectation that in the future they probably will be issuing dividends/buybacks. Berkshire-Hathaway has only paid dividends once since Buffet took over, and is the highest priced stock listed on the NYSE.
- fiprofessor 3y agoBut Berkshire Hathaway does do stock buybacks.
- scotty79 3y agoPeriodic stock buybacks and resales are a slow version of pump and dump.
- scotty79 3y agoWhen company goes public its shares become tokens in the casino. Shreholders can sell their shares to people who want to gamble with them. And just one reason is sufficient for people to want to take a gamble and purchase them. It's enough that they believe that they'll be able to sell it for more later. And they are not wrong. As long as the name on the token takes a prominent place in public consciousness people will flock to it and early investors will be able to sell it for more. If you want to see what's sufficient for people to invest in something look at shiba inu crypto token or WIF. Who would create a company for 100k if it can sell it to gamblers for millions when it goes public? Plenty of people. There's whole industry of angel investors fuelled by thay dynamic.