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Dividends Rule

For public companies
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The Securities and Exchanges Commision (and similar organizations world wide) already have plenty of rules governing how companies can raise money and go public, and disclose information.

For instance, one rule that many people probably don't know about -- once you have more than 500 shareholders, you MUST be public on some exchange (or in other words, your investors must be liquid in their holdings).

At the same time, we have a lot of concern about tech monopolies cementing their rule in part by leveraging the tremendous growth in their revenues (and corresponding growth in stock price) to enshrine their domination.

As of now current AntiTrust law is not really designed to deal with the tech giants, as they're nothing like Standard Oil.

And how exactly would one "break up" Facebook?

One idea is to force public companies over a certain capitalization size, and with a sufficient revenue stream to pay at least minimal dividends. This "free market" solution has the following advantages:

1. It will tend to drive down pure price speculation.
2. It will tend to reward long term holders, and provide them a measure of security for long held leaders that can nevertheless disappear in an instant (think what happens to Amazon stock the day Bezos drops dead).
3. It will provide this measure of security without forcing the investor or speculator's hand, i.e. they can still reinvest the dividends right back into the stock.
4. It will provide a break on careless growth -- where the company would not be able to "reinvest" every penny in growth.
This does put some additional dictates on the company's allocation of capital -- but really towards shareholder rights, which seems appropriate.

The dividend would be a fraction of top-line revenue, so not subject to manipulation by purposefully losing money.

Put another way and perhaps more simply, once you go public, you must pay your shareholders something on an ongoing basis, while they can individually chose to forego it and reinvest it back into the company.

theircompetitor, May 03 2018


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Annotation:







       Capitalisation here being share cap or market cap?
calum, May 03 2018
  

       Market cap
theircompetitor, May 03 2018
  

       I wonder what this would do to productivity, as shareholders also have jobs but might start relying less upon them for income.
RayfordSteele, May 03 2018
  

       that would be tough. But cash gives you the opportunity to buy those other companies
theircompetitor, May 04 2018
  

       I thought the expression was "Dividends conquer"?
MaxwellBuchanan, May 04 2018
  

       divini, dividi, divici
theircompetitor, May 04 2018
  

       Da Vinci?
RayfordSteele, May 04 2018
  

       Wrong code.
pertinax, May 04 2018
  


 

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