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   Brion Vibber :blobcatcoffee:​ (brion@bikeshed.vibber.net)'s status on Friday, 06-Jan-2023 07:06:43 JST Brion Vibber :blobcatcoffee:​

   it's weird that investors care about stock prices instead of dividend payouts

   it's almost like they have no desire to be *investors in a business* because the stock market promises MAGIC MONEY FROM NOWHERE through speculation on the stock certificates themselves

   • Embed this notice
     on-lain ✔ᵛᵉʳᶦᶠᶦᵉᵈ (lain@lain.com)'s status on Friday, 06-Jan-2023 07:06:42 JST on-lain ✔ᵛᵉʳᶦᶠᶦᵉᵈ

     in reply to
     @brion There's no real wealth difference between dividends being paid or not being paid, from the perspective of the investor. If dividends are paid, you get the money but the company loses it, lowering their value and the value of your stocks. If the dividends aren't being paid, the money stays in the company, keeping its stock value high.
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     on-lain ✔ᵛᵉʳᶦᶠᶦᵉᵈ (lain@lain.com)'s status on Friday, 06-Jan-2023 07:33:09 JST on-lain ✔ᵛᵉʳᶦᶠᶦᵉᵈ

     in reply to
     @brion amazon famously never pays dividends, but there are still many investors who'll gladly have it in their portfolio for the long run.
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     Brion Vibber :blobcatcoffee:​ (brion@bikeshed.vibber.net)'s status on Friday, 06-Jan-2023 07:33:10 JST Brion Vibber :blobcatcoffee:​

     in reply to

     • on-lain ✔ᵛᵉʳᶦᶠᶦᵉᵈ

     @lain keeping at least some money in the company is actually great! That means it's able to achieve its goals better.

     But I've never been convinced that turning over control of society to rampant price speculators has been anything but a disaster, and I'd prefer any such speculation to be removed from the incentive structures.

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     Explosion Guy (explosionguy@freespeechextremist.com)'s status on Friday, 06-Jan-2023 07:34:49 JST Explosion Guy

     in reply to

     • on-lain ✔ᵛᵉʳᶦᶠᶦᵉᵈ
     @lain @brion an efficiently run company shouldn't have a big pile of cash on its books. That money is ideally reinvested in expansion, R&D, etc. But at the theoretical level, there are two things underlying the value of a stock: the discounted value of future dividend streams, and the residual equity claim in the event of liquidation. The problem with the latter is that in most actual bankruptcies, there's little or no value left over for shareholders after the creditors are done with all their higher-priority claims.
     
     Dividends are perfectly fine if the company isn't planning for growth and the management thinks that their investors probably have better uses for cash. Even in ones that are still growing, a small dividend is better than none in my opinion. It shows confidence in its business model.
     on-lain ✔ᵛᵉʳᶦᶠᶦᵉᵈ likes this.