Re:Fake Tesla, Apple stocks have started trading on blockchains
by saalweachter on Wednesday July 07, 2021 @12:29PM
(#27762942)
Eh, once you start averaging across market caps and counting stock buy-backs as the back-door dividend they are, it becomes far less common. Amazon is the one big outlier there; IIGC, they've only performed a buyback once.
The S&P 500 disburses ~half a trillion USD in dividends each year, and performs another ~half a trillion USD in stock buybacks. You shouldn't discount that second half.
The textbook answer to stock value is dividends. Many companies, most, I would argue, never reach that point.
In practice, the chief defender of fundamental value is M&A. Whole-company buyers can tap free cash flow in a way minority investors can’t. That is the arbitrage that sets a lower bound on the value of a company’s shares relative to its cash flow. (There is no similar mechanism for setting an upper bound.)