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Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL
reply to chunky

Re: Not transparent, but necessary

said by chunky :

Exactly, get everybody off the unlimited plans so we can make more money. The greatest thing in history. I know that if I can get the top 5% off there unlimited plans I can sock them with overages, overages, and overages. My wallet get bigger, my investors have a big on there faces, and my costomers can just get screwed.

Sarcasm, but true of course.

Most stockholders of a company do not get any benefit from being profitable or more profitable as stock price is not tied to actual company profits. The stock price is set by traders on the stock market. The company profits can go down and their stock price can go up at the same time.

The only shareholders who can benefit from more profits are those that get issued a dividend because profits are up.


chunky

@comcast.net

Well, thank you very much for that info, didn't actually know that, (maybe I will think about taking that economics class), but either way they are only doing this to get a money grab and a higher bonus.



scavio
Premium
join:2001-07-14
Melmac
reply to Oh_No

said by Oh_No:

Most stockholders of a company do not get any benefit from being profitable or more profitable as stock price is not tied to actual company profits. The stock price is set by traders on the stock market. The company profits can go down and their stock price can go up at the same time.

The only shareholders who can benefit from more profits are those that get issued a dividend because profits are up.

Current and future profitability have a lot to do with stock price. A vast majority of the time a company's stock price is largely driven on how much money people think it will make. This is an oversimplification, but generally, if you increase profits and are moving on a path that will generate even more profits, your stock price will go up.

A dividend, however, has nothing to do with a profits other than a company that pays them is generally profitable in order to afford it. For instance, Apple makes money hand over fist and doesn't pay a dividend.


Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL

said by scavio:

Current and future profitability have a lot to do with stock price. A vast majority of the time a company's stock price is largely driven on how much money people think it will make. This is an oversimplification, but generally, if you increase profits and are moving on a path that will generate even more profits, your stock price will go up.

Nope, there is no link between profits and stock price.
Profits can go up and stock price can go down.
Profits can go down and stock price can raise.
Stock price is 100% based on what the next guy is willing to pay for it.
said by scavio:

A dividend, however, has nothing to do with a profits other than a company that pays them is generally profitable in order to afford it. For instance, Apple makes money hand over fist and doesn't pay a dividend.

A dividend is the strongest connection to profits you will get for stock holders. If the company is more profitable they are more likely to issue a dividend. Stock price has no connection to profits.


Morac
Cat god

join:2001-08-30
Riverside, NJ
kudos:1
Reviews:
·Comcast

said by Oh_No:

Nope, there is no link between profits and stock price.
Profits can go up and stock price can go down.
Profits can go down and stock price can raise.
Stock price is 100% based on what the next guy is willing to pay for it.

While that's true, normally people aren't willing to pay a lot for stock in a tanking company. The inverse is also true. People tend to buy stock in companies that are doing well (or well liked), which is why Apple, Google, Amazon, oil companies, etc stock prices are high.
--
The Comcast Disney Avatar has been retired.


meeeeeeeeee

join:2003-07-13
Newburgh, NY
reply to Oh_No

said by Oh_No:

Nope, there is no link between profits and stock price.
Profits can go up and stock price can go down.
Profits can go down and stock price can raise.
Stock price is 100% based on what the next guy is willing to pay for it.

Actually stock prices in the last decade or so have been MOST influenced by the quality of coke and crack delivered to Wall Street than by much of anything else.


Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL
reply to Morac

said by Morac:

said by Oh_No:

Nope, there is no link between profits and stock price.
Profits can go up and stock price can go down.
Profits can go down and stock price can raise.
Stock price is 100% based on what the next guy is willing to pay for it.

While that's true, normally people aren't willing to pay a lot for stock in a tanking company. The inverse is also true. People tend to buy stock in companies that are doing well (or well liked), which is why Apple, Google, Amazon, oil companies, etc stock prices are high.

Yes, but that is not a real link. It is a gamble every time you make assumptions of how people will buy and sell stock.
A company can be tanking and Jim Cramer can tell everyone to buy it, the price will rise due to sellers taking advantage of the demand, and people will still buy it.


scavio
Premium
join:2001-07-14
Melmac
reply to Oh_No

To say profit and future profitability has nothing to do with stock price is laughable. Yes, the price is based on what someone is willing to pay for it, however, current and future profitability have more to do with a stock's desirability than any other factor.

Dividends are much more complicated than you make them out to be. In fact, I can list numerous companies that pay a dividend that don't even make money (HST, GGP) and I can list even more companies that make a ton of money that don't pay one at all (AAPL, GOOG). Expectations of growth and rate of reinvestment have as much to do with dividends as profitability.



Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL

said by scavio:

To say profit and future profitability has nothing to do with stock price is laughable.

To say it has anything to do with stock price is laughable.

As I said stock price is not linked at all to profitability.
Dividends may have a weak link, but way more so than stock price.


scavio
Premium
join:2001-07-14
Melmac

1 recommendation

I showed perfect examples to back up my point. You just keep spewing the same misinformation over and over again. If profits had nothing to do with stock price, then the leader's of these companies wouldn't care about it. They would just hand out dividends for the heck of it since their job is to provide shareholder value. If you want to say past profitability doesn't have anything to do with stock price, you would be correct. Current and future profitability have a TON to do with stock price.



Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL

2 edits

Leaders of companies are set on raising stock price. Profitablity has no gaurantee of doing that since it is not linked ot stock price. Stock price can easily go down even when profits go up.

They play games of press releases, buy backs, issuing new stock, dividends, buying companies, selling divisions, investing in new equipment. Those are things they do to trying and get people to make decisions.
In reality the only thing they can do to directly affect their price is issuing stock or buying it back. Anything else is just wishful thinking or playing the gambling game.
Please stop with your misinformation.



Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL
reply to scavio

said by scavio:

Current and future profitability have a TON to do with stock price.

No way, that is just 100% wrong.
Stock price is set by buying and selling on the market.


scavio
Premium
join:2001-07-14
Melmac

1 recommendation

reply to Oh_No

I don't know why you dredged this up from so long ago. I started to type a long winded post but decided it's not worth it.

I'm done arguing about this. Technically, a stock is worth what someone is willing to pay for it. If you think that how much a company makes and is expected to make in the future (per share of course) has nothing to do with how much people think it's worth, then I feel sorry for you.

I'm not going to go through the ins and outs of it all. I'll leave you with this headline: Netflix Jumps On Earnings, Guidance Beat »www.thestreet.com/story/11384675···eat.html . Earnings were released, profits and future guidance on profits beat expectations, and the stock went up 10%. I'm done.



Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL

said by scavio:

I don't know why you dredged this up from so long ago.

HUH? you are the one that dredge it up from so long ago and I dont know why.
You can read the dates on the posts.
You and I posted on 2/8 and then you posted on 2/27.
I guess you just made fun of yourself?