Yes, aside from being accountable to shareholders the executives are generally largely compensated in stock (which is easier for the company to offer large amounts of than cash) Or they include the original founders who always had stock
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When negotiating compensation, how much an employee asks for in cash vs equity is a whole signaling thing - at the executive level it's a matter of holding yourself responsible for how well the company does, the stockholders want you to have skin in the game
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As far as whether stock has any value if you don't sell it, it's kind of funny that investing has become so speculative and future-oriented that we've lost sight of this, but stocks are eventually supposed to directly pay you money in the form of dividends
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The whole thing about stock not having value if you don't sell it is also why i get so frustrated with a lof of the billionaire talk. "Jeff Bezos could pay for US health care for a year" and shit. No he couldn't, his entire net worth is stock in a company, not liquid cash.
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Replying to @chton @arthur_affect and
And he can't just sell his entire company in one go because that would cause a major shift in the market and drop the price. He's probably still a billionaire in liquid assets, sure, but not to the scale people think he is. It's not spending money, it's a mountain of solid gold.
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Yeah but Amazon stock is supposed to eventually start sending checks for dividends to everyone who owns some It's just that tech is a fucked up pyramid scheme kind of industry where everyone is hoping for profits in some vague future while barely breaking even right now
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That's absolutely it. Amazon hardly pays any dividends, because they don't have that much profit. The value of Amazon stock is entirely virtual, caused by speculation. It's like antiques. It's not valuable for the material but for the increasing rarity vs demand.
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Which is kind of my point - Ellie is right that the whole speculative market in stocks feels like meaningless nonsense like the prices of rare baseball cards It isn't supposed to be - the price of a stock is supposed to be you betting on how much cash that stock will pay out
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It's not, though. The price of the stock isn't supposed to be about the dividends, but about what the company is worth in its totality - assets, IP, profit margin, employees. Getting a divident paid out is almost just a formality, since profit is supposed to be for the owners.
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Replying to @chton @arthur_affect and
You can buy stock for the dividends if it's a high profit company, but in a lot of cases you buy stock because you think the company will be worth more in the future than it is now. You're banking on it growing, because you own a percentage of it.
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Yeah but this is my hobbyhorse - nothing is worth money in the long run unless it *makes* money in the long run You're right, typically in the modern world investors with confidence in the company are okay with plowing revenue back into growth rather than demanding dividends
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Replying to @arthur_affect @chton and
But the understanding is that someday, if you needed it, you could take the actual cash out of the till that you're entitled to That's what Ellie is objecting to, I think - if that never actually happens then yes the stock market is a scam
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Well, for most stock owners it can happen fairly easily. You can buy stock today and sell it again tomorrow if you need it. It only becomes impossible to do that when your till is so large it would affect the market as a whole.
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