Re:Facebook shareholders are getting fed up with Zuckerberg ...
by nopzor on Wednesday April 17, 2019 @06:08PM
(#19686898)
A stock only has value (theoretically) because it offers cash flow to owners. that cash flow is created by eg distributions (dividends) or as a result of an acquisition. If a stock will never create cash flow for the owner it theoretically has no value.
Re:Facebook shareholders are getting fed up with Zuckerberg ...
by iaabtpbtpnn on Wednesday April 17, 2019 @06:01PM
(#19686852)
In theory, the price of a stock reflects the market's expectation of future dividends. In practice, the market expects lots of things that aren't true.
Re:Facebook shareholders are getting fed up with Zuckerberg ...
by Gibbon1 on Wednesday April 17, 2019 @06:35PM
(#19687031)
I've come around to the idea that stocks have an intrinsic value as collateral/store of value.
I saw that with a family that owned a condemned property. They couldn't rent it but they sure could borrow against the land price (ever rising) minus the cost of demo'ing the old building.
I also think stocks tend to keep up with/beat inflation and thus are better than cash as a store of value.
Re:Facebook shareholders are getting fed up with Zuckerberg ...
by dredmorbius on Wednesday April 17, 2019 @09:31PM
(#19688009)
Bingo.
So long as asset value inflates, it's good for cash via loans. The moreso if asset inflation > nominal interest rates.
Re:Facebook shareholders are getting fed up with Zuckerberg ...
by umanwizard on Wednesday April 17, 2019 @07:29PM
(#19687337)
The expectation doesn't have to be a certainty for this to make sense.
If there is an 0.01% chance of paying $10,000 dividend, or 100% chance of paying $1 dividend, the expected payout is the same.
[0] https://money.usnews.com/money/blogs/the-smarter-mutual-fund... (from 2014, but the number likely hasn't changed substantially)