[hiq]

> Since most crypto tokens produce negligible free cash flows relative to their market cap, they have approximately zero intrinsic value relative to their market price.

What's the intrinsic value of stocks that don't distribute dividends in this model?

[my50cents]

The simple answer is that if a stock is expected to never pay any dividends, it's intrinsic value is zero.

Note that from shareholders' perspective, paying dividends is economically equivalent to share buyback, plus some tax considerations, so there are exceptions.

[hiq]

> The simple answer is that if a stock is expected to never pay any dividends, it's intrinsic value is zero.

Which is obviously wrong, right? Any company that has liquid assets (and no debt) is at least worth the selling value of these assets, even if it doesn't pay dividends. So I'm not sure your model helps here.

[csmiller]

I think in that case you would expect the company to return value to shareholders when liquidating it’s assets.

[hiq]

Exactly, so it doesn't have a value of 0 for these shareholders.

[WastingMyTime89]

You don’t value the cash-flows associated with the share. A share is not an abstract financial product. It is direct ownership of a company.

You value the company and then you can divide the price by the total number of shares if you want. Apart from some rare exceptions like Amazon in its first years, a company which doesn’t generate any cash-flows is soon to be an ex-company.

Dividends muddy the water a bit but you get the general idea.