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Cake day: July 6th, 2023

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  • ammonium@lemmy.worldtoMicroblog Memes@lemmy.worldLine go up
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    27 days ago

    There are plenty of companies that never pay dividends, yet people buy them.

    II struggled with this as well for a while. You can look at it this way, they are worth money because they could pay dividends, but they don’t actually have to. Your bar of gold is worth a certain amount of money equal to the money you could sell it for, and your money is worth something because you could buy something with it.


  • ammonium@lemmy.worldtoMicroblog Memes@lemmy.worldLine go up
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    27 days ago

    Because that’s how the stock market works, the price of a stock is the current value of assets (including cash) + expected earnings (with some correction factors for risk and time). If the company pays out $x of cash it’s $x worth less. You might not always see it it the stock price because expected future dividend payments are also already priced in.

    How do you think it works?


  • ammonium@lemmy.worldtoMicroblog Memes@lemmy.worldLine go up
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    27 days ago

    Imagine you have 10 stocks worth $10 each.

    Scenario 1: There is $1 dividend per stock. You now have 10 stocks worth $9 each for a total of $90 in stocks and $10 in cash.

    Scenario 2: There is no dividend but you decide to sell 1 stock, you now have 9 stocks of $10 for a total of 90$ in stocks and $10 in cash.

    These scenario’s are equivalent unless the stock wasn’t priced correctly.




  • There’s a reason Chrome was able to steal the alt browser market from Mozilla at a time when even laymen understood that IE was awful - Mozilla stopped innovating the second they were winning. They had tabs! What more could you want?

    That’s part of the story, but even more important is that they shoved it down everyone’s throat.