I think of it like this. If you suddenly owned 100% of Bitcoin, then you wouldn’t actually have anything valuable - nobody would buy it off you. If you suddenly owned 100% of Tesla then you’d be able to extract a lot of value.
hmm. it might be a bit more subtle than that - if you were to own all 21 million bitcoin (i.e, nothing can be mined or otherwise created), it’d pose an existential crisis for the currency. miners would have no reason to mine, transactions on the small scale couldn’t happen, etc.
at the very least i expect other coins would pop up with a different genesis block. or maybe some form of hard fork (again, i might add).
owning them all might be problematic. 99% might not be.
that said, i don’t think it can be done for >100 years yet..
You seem to ignore the fact that you would then have access to 100% of the revenue that Tesla makes by selling cars and other things.
(This in turn sort of guarantees a price floor for stocks in public companies: the price of a stock shouldn't really go below the net asset value of the company.)
Why would public opinion matter if your company wasn't public?
IMO it's a beautiful thing if your company can be aligned 100% with customers and not some random idiots that want participation in your company issues without even owning a Tesla let alone an EV. No earnings reports, no SEC wasting your time.
Only reason companies (unfortunately) need to go public is the need for upfront capital or early-stage capital that wants an exit.
The second part is very significant. Many people want to diversify their risk, and public companies allow that. Rather own 10% each of 10 companies than 100% of one risk-wise.
If you own literally all of the stock in Tesla... how could the stock crash? There's no stock being traded for its value to change.
Of note, there are examples in the past of companies going private without falling apart--Dell is the most notable example I can think of off the top of my head.
If nobody is bidding, there's no asks to cause the price to go down. More likely, someone buying all of the stock either a) intends to take it private, at which point there is no more stock anymore or b) intends to fold it into another company, at which point there is no more stock anymore. (Of course, the valuation would likely go down anyways, because people usually pay a premium to buy all of the stock.)
Yes, yes, in theory it has no stock price. In practice if I do want to sell - privately or not - I wouldn't get anywhere as much as the price was beforehand.
> I wouldn't get anywhere as much as the price was beforehand.
that's not a conclusion, but an assumption you make.
The price of a stock can only be found by transacting, and if this isn't taking place, you cannot draw any conclusions about the price of a stock. You can only guess it - via some method like cashflow analysis, or some other model.
It's pretty obvious we are indeed guessing given that this is a hypothetical. My guess is that if suddenly I own 100% of Tesla, the company will be worth a lot less after that. It is clearly not based on actual transactions or offers to need to specify that it was a guess.
That is true, but only because a) the market for entire companies is fairly small, and b) Tesla, overall, is vastly overvalued.
If you look at other companies like Dell, or the various acquisitions of Berkshire Hathaway, you would find plenty of examples of people deciding the market price of companies was less than the value, doing exactly what you are arguing can't happen, and making money from it.
I mean if they pay a dividend (and you believe it will continue) you can do math that treats it like a bond coupon and do a present-day valuation.
If they have attached voting rights you can get together with other investors and vote yourself a bigger dividend (though same goes for Uniswap v2), or a share buyback.
Firms used to give out dividends, that would make it easier to claim it had intrinsic value (future cash flows discounted). Now it appears the only intrinsic value is how much another firm would pay to acquire the company and do X with it.
There are plenty of companies that give dividends. I own about a hundred different stocks and 99% of them are dividend bearing to the tune of about $200K per year.
Stocks go down every time they give out dividends so you never really make anything. And you will never beat inflation with dividends.
Dividend investing is stuff of 1980's folklore. These days it's all about modelling and executing on hype. We're entering an era where hype is intrinsic value. I'm not advocating for a world like that, but it's the world we live in now whether we like it or not.
No… Your claims are typical of how people talk during peak bubbles. It's very similar to how people talked about buying any tech IPO stock in 1999, even when the companies had hopeless business models. The way I expect they'll get disproved is simply when the market cycle turns. Right now there's a powerful illusion that asset prices have become unmoored from expected returns, but at some point macroeconomic conditions change and the demand to liquidate the assets becomes significantly higher than the demand to keep buying them at their previous prices. Like if S&P P/E multiples begin a steady slide from 30 to 15 due to less liquidity in the economy, everyone's stock portfolio will feel like a bloodbath. In such an environment, demand for all these crazy coins also dries up and prices plummet (so much for being a "store of value"), since there are no cashflows that reward the purchasers and set a floor on the price; it's entirely - as you say - a function of the current “hype” i.e. buy-side demand level.
Really? My impression is that many US equities in 2022 are more like Reddit up/downvote scores than a reflection of intrinsic value.
Which isn't a bad thing in my opinion, by the way.