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Author Topic: Is there a market for non-dividend stocks?  (Read 1809 times)
stslimited
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May 10, 2013, 02:39:41 AM
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Is there a market for non-dividend stocks here?

In the long established stock markets, dividend issuing stocks are a small subset of publicly trading companies.

so I am just curious if there is an appetite for growth companies, particularly non-mining companies.

in the stock market, trusts for oil wells and real estate issue dividends more often and at greater value than other issues. so it is expected for bitcoin mining companies to issue dividends, but would like to know the appetite investors here have for other kinds of share companies.
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May 10, 2013, 02:46:59 AM
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Are you referring to just BTC-denominated companies? I'm not sure... There would have to be some major benefit to offset the the lack of dividends (imo).
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May 10, 2013, 02:53:09 AM
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Are you referring to just BTC-denominated companies? I'm not sure... There would have to be some major benefit to offset the the lack of dividends (imo).

I am referring to btc-denominated companies.... the benefit of such a company being growth potential, maybe obviously? market share in its good or service?

you have to admit, it would be very ironic to find holders of a risky, volatile asset like bitcoin, to be flocking to conservative dividend companies

anyway, just doing market research.
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May 10, 2013, 03:04:58 AM
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I'd say it's more a nature of how undeveloped the BTC stock environment is. Most stocks have to be offering dividends because bitcoin in itself is a volatile investment, and for someone to give up just a slight bit of liquidity, they'd have to get something worthwhile in return. Most stocks do not have the track record to sell themselves as a pure value play.

An example of a stock that doesn't pay a dividend but may have a value play is Virtex (www.cavirtex.com), the main Canadian exchange is listed on Havelock Investments (www.havelockinvestments.com). Currently it does not pay a dividend. Although they say they may in a few months. Smiley

Disclaimer: I do not currently hold any position on Virtex shares.

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May 10, 2013, 01:54:05 PM
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Part of the reason people demand dividend payments is because there is so little transparency/regulation/auditing within the bitcoin stock environment. If you are not paying dividends, then people have no way to know you are actually making money like you claim. If you can find a way to convince people that you hold what you say you hold and such, then people would be willing to buy non-dividend shares in your company.

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May 10, 2013, 02:52:33 PM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

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May 10, 2013, 03:04:59 PM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

But even when those companies were non-dividend paying growth companies it was possible to realize the profit from holding them, you just had to sell a portion of your shares.

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May 10, 2013, 03:10:54 PM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

But even when those companies were non-dividend paying growth companies it was possible to realize the profit from holding them, you just had to sell a portion of your shares.

When you sell your shares, you stop being a shareholder, but become a speculator/trader. That's why most dividend investors use their dividend to BUY more shares, not sell shares.

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Peter Lambert
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May 10, 2013, 03:18:14 PM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

But even when those companies were non-dividend paying growth companies it was possible to realize the profit from holding them, you just had to sell a portion of your shares.

When you sell your shares, you stop being a shareholder, but become a speculator/trader. That's why most dividend investors use their dividend to BUY more shares, not sell shares.

What is the difference between the company paying dividends and you reinvesting them back into the company vs the company just reinvesting the profits? If the company makes 10% profit and pays it to you as dividend, or if the company makes 10% growth and you sell 10% of your shares, either way you end up in the same place, right?

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May 10, 2013, 05:25:50 PM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

But even when those companies were non-dividend paying growth companies it was possible to realize the profit from holding them, you just had to sell a portion of your shares.

When you sell your shares, you stop being a shareholder, but become a speculator/trader. That's why most dividend investors use their dividend to BUY more shares, not sell shares.

What is the difference between the company paying dividends and you reinvesting them back into the company vs the company just reinvesting the profits? If the company makes 10% profit and pays it to you as dividend, or if the company makes 10% growth and you sell 10% of your shares, either way you end up in the same place, right?


Because at some point the company will run out of place to invest the money in. By not paying dividends, the company is saying I know better than you in investing your money. If investors believe it, then it's ok. If investors don't believe it, they will punish the company's stock price. For example AAPL right now is basically forced to distribute its 140B cash stock pile to shareholders.

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May 10, 2013, 05:41:13 PM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

Exactly like Berkshire Hathaway, for example.

Companies don't have to pay dividends. A share is an ownership in the company and if the company value grows, so does the share value. Paying dividends reduces the company value and thus the share value. If ASCM had currently sat on their entire dividend payout, the company value would have been massive and the share value too.

For a company like Berkshire Hathaway, the simple equation is this: Can you beat Warren Buffet in investing? If not, you would lose money from getting a dividend rather than letting him do what he's currently probably the best person in the world to do.

For a company like ASCM, the equally simple equation is this: Can you beat friedcat in building ASICs and runing a mining operation? It not, you lose money from getting a dividend rather than letting him do what he's currently probably one of the best persons in the world to do.

If you need the money, sell your shares.

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May 10, 2013, 05:44:56 PM
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Because at some point the company will run out of place to invest the money in. By not paying dividends, the company is saying I know better than you in investing your money. If investors believe it, then it's ok. If investors don't believe it, they will punish the company's stock price. For example AAPL right now is basically forced to distribute its 140B cash stock pile to shareholders.

This is true when a company starts to outgrow its potential market, but until then, a company would probably do a better job in their markets than you would.

Of course, if you change your priorities or tastes in markets, moving from one share to another makes sense.

I don't see how this equates to every company, though. Only certain companies, and AM may very well me one of those, for example, will reach a level where their investors benefit from dividend payments because, like you say, there simply isn't anything the company can do at the present time to grow any more.

.b

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May 10, 2013, 11:02:31 PM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

not really, often times you see a one time special dividend, singular, to return money to shareholders

dividend companies generally pay dividends quarterly, not weekly or daily like bitcoin mining and gambling companies have been doing

AAPL was a non-dividend company for 20 years

obviously you distinguish yourself as a dividend investor, but there are plenty kinds of market participants

my question is if the bitcoin community, the whole thing, has a risk appetite for growth companies. paying dividends quarterly, or weekly or daily, has nothing to do with a lack of transparency
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May 10, 2013, 11:11:09 PM
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my question is if the bitcoin community, the whole thing, has a risk appetite for growth companies. paying dividends quarterly, or weekly or daily, has nothing to do with a lack of transparency

I would have no problem investing in growth stock, depending on the prospect of course.

The issue I have right now is that the market is too small to get a fair valuation of a share. A pure growth share must take reporting very seriously to maintain the ability to evaluate a share. Simply firing up an IPO and then heading back to the garage to keep fixing whatever it is one is fixing simply won't cut it. Regular reporting, projections, preferably some form of public books, and so on should be the least one should expect.

This applies to all crypto shares, though, not just growth, and not just BTC. Shareholders must be kept in the loop, plans must be laid out, and progress towards goals should be published if not detailed.

ASICMiner is doing a fair job at this, but is still lightyears behind what should be expected in a mature market. AM is also paying dividends, which is either very good or very bad; we simply don't know because we don't see the books :-)

.b

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May 10, 2013, 11:32:47 PM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

not really, often times you see a one time special dividend, singular, to return money to shareholders

dividend companies generally pay dividends quarterly, not weekly or daily like bitcoin mining and gambling companies have been doing

AAPL was a non-dividend company for 20 years

obviously you distinguish yourself as a dividend investor, but there are plenty kinds of market participants

my question is if the bitcoin community, the whole thing, has a risk appetite for growth companies. paying dividends quarterly, or weekly or daily, has nothing to do with a lack of transparency

There is a risk appetite, no question. Being in BTCitcoin itself is a risk. The trading platforms are a risk. Everything here is high risk.

One of the differences here is that there is no tax on the dividend payment. A public company pays tax on the dividend as income, and the shareholder pays tax on it as income as well. It's double-taxed.

In the BTCitcoin world, because the companies are not recognized to exist, there is no legally recognized profit, there is no tax. Usually there is no or little view into the bookkeeping, and no auditing.

This is also a risk, due to the fact that the company could potentially end abruptly. For that reason, dividends are usually required to be high and often. The investor wants to be re-paid for his investment in months, not years or decades.

Take some time to research the scams, destroyed exchanges, holding companies and general volatility.

I recommend taking about BTC30 and investing it in multiple places for a month or so. Spend time understanding the exchanges and sites you use and how other people view and use them. There is no legal recourse to protect you. You must use your wits and think hard about your exposure.

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May 11, 2013, 12:08:11 AM
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No, eventually the company MUST pay dividends, as that's the only way a shareholder can realize benefit in holding the company(other than waiting for the rare event of some other company acquires your company with cash). A company can delay dividends because it can better use the funds to grow, but eventually it will HAVE to pay dividends. Even the mighty AAPL pays dividends, so does MSFT, INTC, NVDA, QCOM etc... they were once all non-dividend paying growth companies, but eventually, they pay dividends.

not really, often times you see a one time special dividend, singular, to return money to shareholders

dividend companies generally pay dividends quarterly, not weekly or daily like bitcoin mining and gambling companies have been doing

AAPL was a non-dividend company for 20 years

obviously you distinguish yourself as a dividend investor, but there are plenty kinds of market participants

my question is if the bitcoin community, the whole thing, has a risk appetite for growth companies. paying dividends quarterly, or weekly or daily, has nothing to do with a lack of transparency

There is a risk appetite, no question. Being in BTCitcoin itself is a risk. The trading platforms are a risk. Everything here is high risk.

One of the differences here is that there is no tax on the dividend payment. A public company pays tax on the dividend as income, and the shareholder pays tax on it as income as well. It's double-taxed.

In the BTCitcoin world, because the companies are not recognized to exist, there is no legally recognized profit, there is no tax. Usually there is no or little view into the bookkeeping, and no auditing.

This is also a risk, due to the fact that the company could potentially end abruptly. For that reason, dividends are usually required to be high and often. The investor wants to be re-paid for his investment in months, not years or decades.

Take some time to research the scams, destroyed exchanges, holding companies and general volatility.

I recommend taking about BTC30 and investing it in multiple places for a month or so. Spend time understanding the exchanges and sites you use and how other people view and use them. There is no legal recourse to protect you. You must use your wits and think hard about your exposure.

oh I am aware of all these things. No stranger to the exchanges, got educated on the scams.

I am considering issuing a security, but it isn't a mining company or gambling company or fund, so I am still trying to determine what the appetite is... before I post about it and get accused and slander all over this subforum.
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May 11, 2013, 02:06:20 AM
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oh I am aware of all these things. No stranger to the exchanges, got educated on the scams.

I am considering issuing a security, but it isn't a mining company or gambling company or fund, so I am still trying to determine what the appetite is... before I post about it and get accused and slander all over this subforum.

The reason those types are so popular is that they are arguably able to be based in bitcoins and avoid the exchange rate risk. The fundamental question you will have to answer is: will you be able to beat simply holding bitcoins?

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May 11, 2013, 03:26:37 AM
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oh I am aware of all these things. No stranger to the exchanges, got educated on the scams.

I am considering issuing a security, but it isn't a mining company or gambling company or fund, so I am still trying to determine what the appetite is... before I post about it and get accused and slander all over this subforum.

The reason those types are so popular is that they are arguably able to be based in bitcoins and avoid the exchange rate risk. The fundamental question you will have to answer is: will you be able to beat simply holding bitcoins?

I agree with Peter Lambert. There's a likelihood that for the next few years, simply holding BTCitcoin will blow away most any company. If you can achieve 150% - 400% annual growth rates, you will probably be within shouting distance. Can you do that?

Having said that, this might just be the right time to do what you are considering. Right now, I'm also considering the idea that the USD-BTC exchange rate may remain fairly flat (+/- 20%) for as much as the next 18 months. But hey, predicting the future is so much easier after you see it happen.  Cool

The miners are so compelling because you receive a dividend and some of them even attempt to stay abreast of the network hashrate, meaning that your dividend grows at the exchange rate when considered in USD. Can you offer growth that attains that?

I think that the most interesting story is ASICMiner, as you probably know. But have you considered this: the initial investment for a board seat around Sept 2012 was BTC500 which was something like $5500 - $6500 at the time. Maybe even less if you had been hashing for a while. That was for 5000 shares, currently worth about BTC7000 or about $770,000 today, only 8 months later. That's after handsomely paying you back for your investment by the Ides of March.

All that happened without the involvement of the mainstream stock markets and their hampering rules, regulations and fees.

How do you trump that with a non-mining company?

If you can, I'm looking for diversification, but hey, this is BTCitcoin. Gimmie my dividend. Preferably daily.  Cheesy

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May 11, 2013, 12:35:24 PM
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Is there a market for non-dividend stocks here?

In the long established stock markets, dividend issuing stocks are a small subset of publicly trading companies.

so I am just curious if there is an appetite for growth companies, particularly non-mining companies.

in the stock market, trusts for oil wells and real estate issue dividends more often and at greater value than other issues. so it is expected for bitcoin mining companies to issue dividends, but would like to know the appetite investors here have for other kinds of share companies.

What you say is true, and the market is slowly moving away from high-dividend, poor future perspective to lower dividend, better future perspective stocks (as demonstrated by S.MPOE being roughly just under the combined market valuation of all other assets combined). However, it will take time for the market to mature, and the voice of the poor hopefuls (oh I have a hundred bucks and will become an internet millionaire) is still too strong (especially here on the forum).

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May 11, 2013, 03:49:25 PM
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oh I am aware of all these things. No stranger to the exchanges, got educated on the scams.

I am considering issuing a security, but it isn't a mining company or gambling company or fund, so I am still trying to determine what the appetite is... before I post about it and get accused and slander all over this subforum.

The reason those types are so popular is that they are arguably able to be based in bitcoins and avoid the exchange rate risk. The fundamental question you will have to answer is: will you be able to beat simply holding bitcoins?

I agree with Peter Lambert. There's a likelihood that for the next few years, simply holding BTCitcoin will blow away most any company. If you can achieve 150% - 400% annual growth rates, you will probably be within shouting distance. Can you do that?

Having said that, this might just be the right time to do what you are considering. Right now, I'm also considering the idea that the USD-BTC exchange rate may remain fairly flat (+/- 20%) for as much as the next 18 months. But hey, predicting the future is so much easier after you see it happen.  Cool

The miners are so compelling because you receive a dividend and some of them even attempt to stay abreast of the network hashrate, meaning that your dividend grows at the exchange rate when considered in USD. Can you offer growth that attains that?

I think that the most interesting story is ASICMiner, as you probably know. But have you considered this: the initial investment for a board seat around Sept 2012 was BTC500 which was something like $5500 - $6500 at the time. Maybe even less if you had been hashing for a while. That was for 5000 shares, currently worth about BTC7000 or about $770,000 today, only 8 months later. That's after handsomely paying you back for your investment by the Ides of March.

All that happened without the involvement of the mainstream stock markets and their hampering rules, regulations and fees.

How do you trump that with a non-mining company?

If you can, I'm looking for diversification, but hey, this is BTCitcoin. Gimmie my dividend. Preferably daily.  Cheesy

well my idea is bitcoin denominated, in the bitcoin economy, that will benefit all bitcoin and cryptocurrency participants and strengthen the economy if the idea is sound
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