> Well unless they pay no dividend, have dual-class share structure, and IPO without a profitable quarter. What’s a share of SNAP entitle you to exactly? Ah right, you think someone will buy it for more.
I think the idea would be like what happened to Apple: they eventually grew so much, became so successful, accumulated huge piles of cash bigger than they could possibly spend, that they had to start paying a dividend.
And there is a difference between a company with an inherently unprofitable business model, and a company that would be profitable if they didn't spend so much on growth. Admittedly, it is pretty hard to distinguish those sometimes, especially with the endless rounds of Series D, E, F, G, H, I, etc funding some startups are getting.
That is all speculative, but it's not unproductive beanie babie trading. It is pretty close, especially when the only rationalisation I can think of involves Apple paying dividends, which they didn't do for decades, and Facebook and Google still don't.
Even tulip selling is actually a real business, the tulip mania wasn't as bad as crypto from the "real value" perspective, I think.
>I think the idea would be like what happened to Apple: they eventually grew so much, became so successful, accumulated huge piles of cash bigger than they could possibly spend, that they had to start paying a dividend.
Not a great example, Apple paid out a quarterly dividend from 1987 to 1995. They paid out a dividend in those years because they were cashflow positive and that was just the thing you did because the idea of "hypergrowth" wasn't a thing.
Don’t forget share buybacks, which have become more popular as of late. Dell being the prime example in the tech industry by leveraged buyout and making it private.
Perhaps let's just talk running a poker table. It's a platform where people can play a zero sum game against each other. To me, that's what cryptocurrency is. People want to play these games. That, to me, is real value.
> they eventually grew so much, became so successful, accumulated huge piles of cash bigger than they could possibly spend, that they had to start paying a dividend.
Investors forcing the replacement of shareholder-unfriendly management. US companies tend to be better at returning cash to shareholders by buyback or dividend than many other locations (probably half the reason Asian shares are often cheap, they hold loads of useless money on the balance sheet)
I think the idea would be like what happened to Apple: they eventually grew so much, became so successful, accumulated huge piles of cash bigger than they could possibly spend, that they had to start paying a dividend.
And there is a difference between a company with an inherently unprofitable business model, and a company that would be profitable if they didn't spend so much on growth. Admittedly, it is pretty hard to distinguish those sometimes, especially with the endless rounds of Series D, E, F, G, H, I, etc funding some startups are getting.
That is all speculative, but it's not unproductive beanie babie trading. It is pretty close, especially when the only rationalisation I can think of involves Apple paying dividends, which they didn't do for decades, and Facebook and Google still don't.
Even tulip selling is actually a real business, the tulip mania wasn't as bad as crypto from the "real value" perspective, I think.