Stocks have no real value if a company won’t buyback / dividend


Yes I know about the https://www.investopedia.com/terms/g/greaterfooltheory.asp

But when thinking about it, stocks are not too far from cryptocurrencies if we could be sure that the company will abide by these 3 rules:

  1. Never have dividend
  2. Only 49% of the overall stocks are for sell (you can never control the company)
  3. Never do buybacks

There are many companies that answer all of these 3 criteria and yet their stocks have value.

Isn't it the same a cryptocurrency basically? lets assume I create “Ogabuga” currency and selling it to the public, the only value it has is how much people want to pay for it, it can't generate value by its own.

Now lets think about company A.

Company A issues some amount of stocks but selling only 49% of it.

Company A vows to never do any buyback or dividend.

Lets say I bought some of the stocks for 1$ each, now company A made this year a profit of 10248191 trilion dollars.

Why would my stocks be worth more? I can't do anything to get money out of this company, I don't control it and the company doesn't redistribute the money back to me.

My only hope for profit is a “greater fool” that will buy the stocks from me.


Comments

Leave a Reply

Your email address will not be published. Required fields are marked *