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Buying shares in a public company is not an investment. You are not giving them money to spend on things with a payoff. You are betting, either that you will ge
by krakensden 13y ago
Buying shares in a public company is not an investment. You are not giving them money to spend on things with a payoff. You are betting, either that you will get a dividend or that you can find another sucker.
It is remotely possible that you are giving liquidity to someone who will invest the money into something useful. Probably not, though, it's a very small demographic.
- return0 13y agoThat's how it looks to you, but stock markets weren't meant to be betting houses. > You are not giving them money to spend on things with a payoff. how so?
- gsw2 13y agoI believe the parent comment was meant to point out that buying shares on the secondary market does not transfer any money to the company, but instead transfers money to current(or future) stock holders looking to sell(or sell short) their long position. The company would have already received money from the sale of its stock to primary dealers during the IPO ... so for the most part, all subsequent transactions in the market are between investors/speculators.
- icefox 13y agoA company can also buy back shares a way of returning value to the shareholder.