The question is relate to If a stock doesn't pay dividends, then why is the stock worth anything?
And I have something what to add to know more about it.
As a baseline, I should state that I understand that buy stock of a company, I can own one fraction of the company, and can make money if somebody want to buy it with higher price.
But my question is below:
- As a small investor, just own less than millions of company, my right was already represent by some big investor, of course I cannot find out which part of the company really belongs to me.
- While the company became big, return to 1, I still cannot get any part of the company.
- If the company will never pay dividend, the only time I can take part of the company back is while the company go to bankruptcy, maybe can get hundred of stock value or even zero from the company.
So on the earth, what do we really can get from the company if it never pay dividend? Maybe just confidence that the company will go bigger which technically not link to small investor.
It seems I had not expressed my idea clearly.
Let's make an analogy.
Assume there is a company which really did not have any business, and assume it have very good market so that nobody knows its real business value but anybody believe he did well.
And every year, it can provide an amazing financial report, so everybody like to buy its stock, and the price increased to a very high price. And it did not pay any dividend.
The question is is there any difference for the company with other real company who did not pay dividend from the small investor's view?