What do you think the value is in a stock that doesn't pay dividends? It seems to me that if you remove them, you're getting into pyramid-scheme territory.
(1) the expected value of the company changing its mind and choosing to pay dividends in future + (2) the value of vote to remove management and replace them with someone who will pay dividends + (3) a legal right to share in the proceeds of sale/dissolution of the company.
These are actually worth quite a lot. But you do make a good point, particularly when it comes to companies like Facebook, who don't pay dividends but have dual class structures so management can't be ousted. I don't know why regulators allow these companies to be floated like that, they're pretty much the antithesis of what public companies are supposed to be. If Zuck's metaverse bet fails (which I anticipate it will), and he doesn't pull another rabbit out of the hat, I expect we're going to see a lot more institutional investors complaining about dual class structures in the next few years.
I don’t know much about FB structure but there has been some murmurs about the board offering Zuckerberg a one way plane ticket to Hawaii soon.
Is this even possible?
“No one” cares about dividends since they are taxed like income and after corporate buy backs going the route next year I wonder what Wall Street will come up with..
You can sell your shares back to the company. That's the stock buyback that the linked article hates so much. It's just a more tax efficient alternative to dividends.
These are actually worth quite a lot. But you do make a good point, particularly when it comes to companies like Facebook, who don't pay dividends but have dual class structures so management can't be ousted. I don't know why regulators allow these companies to be floated like that, they're pretty much the antithesis of what public companies are supposed to be. If Zuck's metaverse bet fails (which I anticipate it will), and he doesn't pull another rabbit out of the hat, I expect we're going to see a lot more institutional investors complaining about dual class structures in the next few years.