1600
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 20 May 2024
1600 points (97.2% liked)
Technology
60123 readers
2781 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each another!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
Approved Bots
founded 2 years ago
MODERATORS
Except, you know, the stock being tied to ownership in a company that sells real goods or services. Definitely problems with how stocks are traded, but they’re quite different from crypto.
That's the scam: without dividends, or at least the reasonable prospect of dividends, it is not tied to the company in any tangible way. Shareholders benefit only from speculation by other investors, and not from actual business operations.
Almost. If you own a share of a company, you own a share of something fungible, namely literal company property or IP. Even if the company went bankrupt, you own a sliver of their real product (real estate, computers, patented processes). So while you may be speculating on the wealth associated with the company, it is not a scam in the sense that it isn’t a non fungible entity. The sole value of crypto currency is in its speculative value, it is not tied in theory or in practice to something of perceptibly equal realized value. A dividend is just giving you return on profit made from realized assets (aforementioned real estate or other company property or processes), but the stock itself is intrinsically tied to the literal ownership of those profit generating assets.
Everything you just said is only true for stocks that pay dividends now, or may pay dividends in the future.
It is not true for companies with zero intention of ever paying dividends.
Historically, when that happens, the creditors walk away with the assets. The shareholders get nothing.
That's the scam. It's not. In practice, the sole value of a zero-dividend stock is the speculative value.
Electricity has value. Crypto value is intrinsically tied to mining costs. Even if you have access to a free source of power like your own solar panels, you have to weigh the cost effectiveness of mining against the revenue from using your panels to backfeed the grid, selling power back to the power companies.
Because crypto is tied to something of utilitarian value, and zero-dividend stocks are tied only to the whims of investors, the stocks are actually a significantly greater scam than the crypto.