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When you invest in an ICO, you get a bunch of tokens in return. From what I understand, these tokens don't generate any dividends, hence they are essentially worthless. Why should one buy them?
Let's compare with buying stocks in a company: The reason company shares have any value is because of dividends (or other profit sharing methods). If a company promises to never distribute any profit to its shareholders, the stock is worth exactly zero. No one would buy them.
I'm trying to make sense of this and I'm certainly missing something here.
I'm voting to close this question as off-topic because it's asking for investment advice. – Murch – 2019-08-20T16:14:00.577
1"The reason company shares have any value is because of dividends." well no, as not all stock generates dividends. – weston – 2017-09-11T16:42:48.860
"Notable companies that don't pay dividends include Berkshire Hathaway (BRK.B), Facebook (FB), Alphabet (GOOG), Amazon (AMZN), and Tesla (TSLA)."
Why do some companies pay a dividend, while other companies do not?
@weston Lots of stocks don't give dividends today, but the prospect of future profit distribution is why stocks have any value. Otherwise, there would be no point of buying stocks (apart from curiosity and stuff like voting rights etc). If the company never plans to issue a dividend, it's just a game of the greater fool. Unfortunately far too many people have bought into the game. – Martin Wickman – 2017-09-12T07:11:42.570
So you are saying that people are only are happy to invest today, tying up thousands of dollars in these companies, in the vague hope that they might get, maybe 5%, return in future years? If that's true, why wouldn't those same people just invest in companies that already are paying dividends today? Because they hope the company will grow and their return is from later investors willing to pay more for the same stake. Investors always don't want dividends, they have to pay income tax on it, and like I said, the % is low in investment terms. – weston – 2017-09-12T12:22:12.837
One buys a no-dividends company today when you think it will (a) start doing it soon, (b) are in growth and eventually will do it, (c) will close down and liquidate assets to shareholders or (d) is bought out. If you do (b) then you're betting profits will increase in the future. If you weather it, you'll not get a measly 5%. This is why stocks prices increases. Btw, this is the reason companies end up with 5% ('ish). If a company would give you 50%, then people would buy shares like crazy until the price goes up so the net return is 5% or whatever. – Martin Wickman – 2017-09-13T10:30:05.587
(continued) The other cases (a, c, d), are easier to understand: you get your money today.Ask around if you don't believe it. That's all I have to say about this. – Martin Wickman – 2017-09-13T10:32:56.213
So you don't believe companies can have value without giving dividends now or in future. And if a company vowed to never give dividends its stock would collapse to zero? – weston – 2017-09-13T10:51:49.653
I know this will shatter your simple abcd view of the stock market but you should read http://www.businessinsider.com/warren-buffett-on-dividends-2013-3 where Warren Buffet explains why his company will never pay dividends. So the price of that share must be zero right? Haha
– weston – 2017-09-13T10:59:09.437Then we're in the case of (c) or (d). Eventually. Which both means dividends in the sense of giving profits back to the shareholders based on number of shares they own. – Martin Wickman – 2017-09-13T18:37:21.300
https://en.wikipedia.org/wiki/Berkshire_Hathaway 230 Billion revenue, assets worth 600 Billion. That company is neither being bought out or liquidated anytime soon! Can't you see that simply owning part of a company is investment enough? You don't need dividend payouts as well. And about (c) liquidation, usually a company is in massive debt and that point and the shareholders are very last on the list of people to get a slice of any recouped funds. No one buys shares with the hope a company will be liquidated. – weston – 2017-09-13T18:53:09.070
Look, this is all basic economics. I tried explaining it to you, but failed. By all means, invest your money as you see fit. – Martin Wickman – 2017-09-14T06:29:47.550
1You're the person asking questions, I tried explaining to you, I even gave you perfectly good examples and sources, but you stubbornly ignored them. Bottom line, companies have a value without dividends. But none of that stock market stuff even matters, ICOs are at best unregulated, and usually just scams. – weston – 2017-09-14T09:23:53.347
I never asked if buying hypothetical stocks with no returns are worthless or not (because it's an economic fact). For the record, I bothered to check this with a guy working in the Nordic stock exchange and another who's a successful angel investor (who is also a huge Buffet fan btw). Both with 15+ professional years. Both corroborate this. Again, invest your money as you see fit. – Martin Wickman – 2017-09-14T11:54:51.450