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Comment by mullen | Hacker News Reader

I just don't understand why Amazon.com stock is so high. Bezos has stated time and time again that he intends for Amazon.com to never make a profit and to never pay a dividend, always folding all of the earnings back into the company for future growth. There is no logic to its value.

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Clearly people think that Amazon will take over the world -- literally -- and their only method of influencing their new overlord will be to have shares to vote.

That's a joke.

Presumably the ultimate belief in the value is either that Bezos will eventually share some value of the company, or that Bezos will retire or die and it won't be his decision, or that stockholders will force a value-sharing over Bezos' objections (he does not, after all, have a majority).

The company can't grow forever in a finite universe. "If something cannot go on forever, it will stop", despite what Bezos says now.

Someday Amazon will either be out of business or paying a dividend.

Isn't this true for all companies? And if so, why is this meaningful in particular for Amazon

Not necessarily. Amazon aspires to have 100% of market share where it competes, or very close to.

Other companies don't aspire to even 50% of market share. See Apple for example. They are happy to have the premium segment locked in and reap the profits out of it.

Buyers anticipate the stock price will rise, and that they can sell it to someone else for more money in the future. More specifically, they're predicting the return on this investment will be greater than the interest they'd earn in the bank. They might be wrong, we'll see.

It's a logical strategy if you want to continue to be valued as a growth company vs. a mature large cap even if it's not true.

Never take "never" literally. Never.

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