674
Line go up
(lemmy.world)
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this post was submitted on 28 Oct 2024
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This is the stupidest thing I've read in a very long time.
Why do you think it works like that?
Because that's how the stock market works, the price of a stock is the current value of assets (including cash) + expected earnings (with some correction factors for risk and time). If the company pays out $x of cash it's $x worth less. You might not always see it it the stock price because expected future dividend payments are also already priced in.
How do you think it works?
Why would anyone buy a stock that will never pay a dividend? The company is worth money because they pay a dividend, not despite it.
No, there are many different kinds of stocks with different terms. Stocks are an asset with value, regardless of whether or not dividends are paid out. It's very commonly the case for shares to be issued with no dividends paid because profits are reinvested back into the company with the goal of increasing the share price for some future massive liquidation event (like an acquisition).
Shares also represent ownership in a company and thus their value is also in the leverage it can give potentially give you in said company.