I have no idea. From what I've made on the dividend + buying it and selling it, it could go to zero and I'd still have made money on it. Admittedly I bought it without much due diligence. Just wanted something to park my savings in for a while and some stock screener shenanigans led me to it. Robinhood has really made it easy for me to make silly decisions. Oh well, lucked out on this one.
hold up, how does that figure? I thought you could only get up to the amount invested back, which is why it is a really not great idea. Investing $3k now might net you up to $3k if the stock hits 0, but it could triple in which case you lose $6k.
Bounded upside, infinite downside. I'm sure it's more complicated but what am I missing?
And if you bought it a few days later (on June 13, 2022) you would be up 20.5% today even without dividend reinvestment. Trying to derive meaning from stock returns over such short periods is meaningless due to the inherent volatility of the market.
It's 50% on top of initial investment and net of capital gains. But you're right - it's more or less a total fail. It was a small amount of stock, but right after I sold it I realized I probably should have just held it to see if they went public.
Sorry, to clarify: I meant end up at zero gain, not zero as in loss. So instead of losing money, it would just be not having gained anything in 10 years, which is not that unlikely, and has happened. Ask me, that is 10 years of potential profit loss, had you invested differently.
Of course. You buy a very risky "investment" using your 401K, that investment goes bust, and you get back...zero divided by zero...carry the zero...you get back zero dollars from your initial investment of $1.
Probably 0x for everyone except the last round investors who would get basically all the cash in the bank due to liquidation preferences, which is probably 0.66-0.84x return IMO.
What? Any price history you look at is going to be split-adjusted. And okay, you got a $1 of dividends...you only lost $29/share out of the $60 you invested.
The overall point holds, but this is more like 0.75 years of profit, or less ($424B market cap x 2.76% dividend yield is a basic calculation, but there's all sorts of accounting reasons why this might underestimate actual profit).
If profit would be reinvested it would be zero and not negative - there is no profit to be reinvested - they need fresh investor blood from time to time ;-)
Well no matter how you look at it, the expected value is .98 of whatever you paid. So in the long run you're certainly going to lose 2% of what you invested.
I think a very large percent of them had a nonzero value, but the issue is if you can get 4% guaranteed return on cash, vs risky 1% return on cash suddenly the asset is worth less than before.
But if you can get unlimited money at 0% you might as well invest it on 1% return bets. You're still making money on others' money.
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