This is wrong. If Amazon earns $1bn extra profit the market cap of the companies shares could/should increase at least $1bn (depending on how it was made, and any future prospects for repeating the win).

However, no money is transferred to shareholders unless Amazon do a buy back or issue a dividend, it's just a revaluation. If those shareholders starting selling, only market forces (belief in Amazon) keep the price up. Shareholders can't demand their share of that $1bn in most cases, short of suing the company.

Stocks can and do trade below book value. Companies with net $1bn in the bank can have a market cap below $1bn in inefficient markets.

It's not market inefficiency causing that, but rather expected value. If a company has $1bn in the bank and you expect them to squander it, then you'd be foolish to value them based off of it.

This same logic explains the value of Amazon; they plow profits back into the business, making the future business bigger and more valuable. Their shareholders clearly agree with that type of longer-term thinking and have rewarded Amazon's growth with giant valuations repeatedly over the years.

With a high enough net worth you don't need liquid assets, large banks provide <1% interest rate loans that get paid off by your estate. Saves on taxes as well

>Shareholders are going to continue to try to hold on to as much of that increase as possible for themselves.

I mean the small shareholders generally don't make much comment about anything, and certainly not about wage control at a company they invest in.

>Those profits aren't sitting in a big vault at Amazon. They are sitting in the bank accounts of every Amazon shareholder.

sure, if the company pays dividends quarterly or if the board doesn't make some other decision on what to do with the money, and of course until the dividends are paid it does sit in Amazon's accounts.

on edit: I see nly made the same point with more technical observations https://news.ycombinator.com/item?id=28927742

So you mean you, me, your grandmother, and everyone else with a 401k or pension?

Stock ownership, along with other forms of wealth, is very unevenly distributed. Far more so than even income.

"Wealthiest 10% in U.S. Own 89% of Stocks and Mutual Funds"

The wealthiest 10% in the U.S. hold 45% of real estate, 54% of pension entitlements, 85% of private businesses and 34% of consumer durable goods.

https://www.thestreet.com/investing/wealthiest-10-pct-in-us-...

You might also care to revisit HN's guidelines:

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Particularly:

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A 401k with a vesting schedule geared at minimizing the already empheral retirement contribution businesses don't want to provide hoping on turnover with vesting to reduce payout and for those remaining with enough disposable income to contribute hefty amounts to their 401k? Sure.

Even 401ks are evaporating in significance so that is becoming a less valid point. Given the typical audience here, you and me sure, but the vast majority aren't reaping rewards or able to tie money up in unrealized gains they cant magically realize like many with piles of investments (often tax free).

Why are 401k's evaporating in significance?

Curious Brit here.

Not sure what OP is referring to because 401(k) balances are at all time highs [0].

[0]: https://www.cnbc.com/2021/08/19/401k-balances-hit-a-new-all-...