Comment by manytimesaway
1 day ago
> You can't just redistribute it as dividends, otherwise it's an admission that you won't grow and giving you more money would be a 0 sum game.
I don't understand the logic behind this.
1 day ago
> You can't just redistribute it as dividends, otherwise it's an admission that you won't grow and giving you more money would be a 0 sum game.
I don't understand the logic behind this.
"Tech stocks are growth stocks", that's pretty much how the market sees them anyway.
So essentially, they are not expected to be boring businesses yielding stable dividends to investors. That's your aristocrats stocks postioning: J&K, P&G, etc.
What is expected from tech stocks is the opposite: small to no dividend, reinvesting inflows into ever growing new businesses and technologies. A tech stock distributing dividends to shareholders instead of reinvesting in new projects would be seen as a mark of failure to innovate, incapacity to grow.
One tangent from this is that few of the big 'household name' tech products that have become infrastructure for modern life for huge amounts of people seem to be allowed to be mature and stable, they must be kept changing (beyond maintenance) or to offer some other new thing.
How much buybacks do tech stocks do?
2025 Apple - 100 billion alphabet - 55 billion Meta - 45 billion
These are roughly 2-2.5% of market cap.
Yeah, it's how you pay dividends at capital gains rate instead of income rate. But also, Apple is kind of stagnant.. if they had something better to do with the money they wouldn't be doing the buybacks.
Correct or not, and I'm sure it is, it seems fucking insane to me. We're still just apes.
When you start breaking capitalism down into small chunks like this, it _is_ insane.
The observation is right but the causality is off. The money comes from extraordinarily profitable lines of business rather than investors. Hiring is driven less by business concerns and more by various layers of management advancing their careers by managing more and larger teams.