How tech companies waste money by hiring employees to boost the ego of managers:
https://www.businessinsider.com/tech-industry-fake-work-problem-bad-managers-bosses-layoffs-jobs-2023-7
This kind of thing infuriates me, because as a shareholder, that money is mine. Without some financial constraint - like dividends - cash flow rich companies blow their revenue on vanity projects, corporate bureaucracy, and other BS. Sure, dividend paying companies can also do this, but at least they have less money to waste, because they're returning value to shareholders.
The story about companies using their retained earnings to grow their earnings is just that - a pretty story. It sounds good, but doesn't work that way. At least by re-investing dividends, you're purchasing more of the same cashflow that a company has proven they can already generate. Not promises of greater earnings, when you know full well they're going to waste large chunks of your money.
Bottom line: I don't trust companies that don't pay a dividend, because they will waste their retained earnings.
[link] [comments] https://www.reddit.com/r/stocks/comments/14wfva7/this_is_why_companies_need_to_pay_a_dividend/
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