>>507972586well anyway, surely Musk is a brilliant man who created several brilliant enterprises, and should have been paid millions and millions for it.
But....billions? Hundreds of billions? Seems really crazy, like REALLY crazy.
So the reason that these corporations have value on the market, is because of the price of the stock. The reason the stock price has value is
1) Speculation
2) The potential that in the future, they might pay some dividends.
But it seems like #2 is way less important, most stocks don't even pay dividends and still get traded.
Well anyway, dividends are basically a tax on the corporation's net income. So if a corporation has a profit of $10 million, they'll pay some of that out as dividends, let's say 30%.
So the value of the stock....is connected to the value of the dividend...which should provide you a return on investment. The value of the stock naturally should settle such that the annual yield of the dividend is about 2-3% of the stock price to offset inflation. Of course, holding the stock itself incorporates risk, which would be factored in as well, hence the stock might yield you a 12% return, with a 10% risk.
But the thing that I'm having trouble with....it seems the billionaire owner is double-dipping his income. The stock value, has value because of dividends, which are a revenue stream that are a percentage of net company profits. So if a CEO owns stocks, he's effectively wetting his beak on the ENTIRE company revenue stream. Which is odd, since he's already being paid for his labor.
Why should you be paid just for owning something? If you start a business and sell stocks, while reserving a massive stock-pile for yourself, you are essentially reserving a massive portion of the future corporate profits for yourself. That