I think I have a fundamental problem of understanding the value of non-dividend stock,
Say, Company A is booming, and has these two parameters:
1.It doesn't pay dividend, ever
2. It's NOT going to get bought/acquired for the next 500 yrs, cuz it's so darn successful
What is motivating me to buy its stock? So when the stock appreciates I sell it to Bob. But the question is, why does Bob even want to buy it in the first place? Because by points 1&2 above, the comapany's never going to be converted to cash in Bob's lifetime. So Bob buys it so he can sell it to Steve. But the same question applies to Steve. Why does Steve want it if it's not going to convert to cash in his lifetime? And so on, so forth.
So, if theoretically this succesful company doesn't pay dividend and won't likely get acquired, what is the exact advantage of owning its stock. Since most small stock holders have no right to access the company profits/assets, how can they ever determine when their stock is converted to cash? And same goes for the next guy who bids for that stock. Are they all living on the same assumption that Company A may get bought during their lifetime and payup?
Thanks for helping