Do companies like Uber, Tesla, etc ever intend to pay dividends? If a stock never intends to pay dividends, the value of the stock is simply the price the next shumck is willing to pay.

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missedthecue 2 hours ago | parent | next [-]

The value of the stock is your share in the underlying business. Because underlying business changes over time (hopefully for the better) you are not simply hoping another shmuck pays you more, like with tulips, whose underlying value does not change with time. You own a portion of a concern that is improving its own fortunes.

Furthermore, dividends are approved by the board once per quarter or once per year. A dividend on a stock is not a contractual guarantee like it is on a bond. Therefore, it cannot be a basis of value.

With your logic, Berkshire Hathaway is a long-running greater-fool tulip bubble whose shares are only bidded up by finding more shmucks.

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nestes 2 hours ago | parent | next [-]

Well, the value of the stock for people who essentially do not have any meaningful control of the business must essentially be tied to the expectation of some liquidity event down the line -- future cash flows. So this could come in the form of dividends, sale of the stock, bankruptcy proceedings, or a purchase of the business.

If I knew for certain (big if) that a business would never have a liquidity event and I couldn't transfer my ownership then it's dead capital for all intents and purposes and you could consider its value essentially $0, right?

	▲	kjshsh123 an hour ago \| parent [-]
		But you can transfer your ownership.

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sebastos an hour ago | parent | prev | next [-]

That’s the story, but it’s bullshit. The underlying intrinsic value of a stock can only be materialized if the company liquidates and you receive a share of the sell off of its assets. How many publicly traded companies abruptly decide they’re tired of the business, stop in their tracks, and liquidate their assets? This only really happens if the company is acquired or if it goes bankrupt. Acquisition is the closest the story comes to truth, but it’s also just forced sale to a greater shmuck. If a company goes bankrupt, a tiny fraction of the current stock price would be realized into cash for common investors because of all the privileged investors and lenders ahead of them, not to mention that the actual value of capital assets etc probably doesn’t cover all the losses (the company’s going bankrupt after all). The value of the underlying capital assets are essentially never returned to the common investors, and the idea that you own a portion of them is in practical terms a lie.

	▲	hattmall an hour ago \| parent [-]
		It's not purely the liquidation value, it's the idea that the liquidation value will continue to increase, or profits will be paid out to owners.

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ozgrakkurt an hour ago | parent | prev [-]

This makes no sense. Why doesn’t the “underlying value” of tulips change?

“Underlying value” is a meaningless word btw

	▲	bitpush an hour ago \| parent \| next [-]
		Things don't have any inherent value. It is priced at a level that a buyer thinks it is worth. A gallon of oil can be $3 or $6 depending on whether someone is willing to pay. It can also be $10 but only if people are willing to buy it at $10 if not "prices will come down to match the demand" - another way of saying it would be $9..$8...$7...$6 until it matches a buyer at which point gas is $6.
	▲	missedthecue an hour ago \| parent \| prev [-]
		The underlying value of a tulip is the same as it was in 2000 and 2026. The underlying value of Google is much different in that same time frame.

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marcosdumay 21 minutes ago | parent | prev | next [-]

US companies normally do stock buy-backs instead.

It is a way to distribute the money to the investors, that their tax system favors.

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2 hours ago | parent | prev | next [-]

[deleted]

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runako 3 hours ago | parent | prev [-]

Excellent question. They may not intend, today, to pay dividends. However, the same question could have been asked about the successful tech companies of the '00s. Companies don't like to start paying dividends until they are fairly certain of their future profit stream and therefore ability to continue paying (and increasing) the dividends in the future.

Apple, Oracle, Nvidia, Cisco, Alphabet, Meta, Salesforce, and Qualcomm all pay dividends now. It's not unreasonable to expect Uber and Tesla to pay in the future. However, the median time after IPO for similar companies to pay a dividend is close to 20 years. So we could expect Uber to perhaps wfstart paying sometime around 2039. Tesla...is Tesla so who knows?