There's no rational reason for a stock's value to go up just because the company does well if it doesn't mean the company will pay out dividends. That's just baseball cards: i.e. your Alex Rodriguez card will be worth more if Alex plays well, unless for some irrational reason other baseball card collectors feel otherwise.
1. If you get enough shares together you can influence the company's behaviour, (not relevant to most people)
2. If someone else wants to influence the company's behaviour they might be willing to pay for your shares, and
3. If the company goes under the shareholders might get something once it gets dissected (not really relevant to AAPL at the moment)
In the case of a company in which all control is held by a majority shareholder who intends to hold 51% forever, you're absolutely right - the valuation of the 49% is almost completely arbitrary, giving no control or ownership in a meaningful sense.
Is 3 ever relevant? Most failed companies go into insolvency and then bankruptcy, which means creditors walk away with it all.
1 and 2 are fair points, but with interesting consequences. By 1 and 2, it would be rational to invest in failing but promising companies, since they are more ripe for takeover. With a successful company like Apple, the profit-maximizing move from shareholders is to make sure they keep doing what they're already doing.
> There's no rational reason for a stock's value to go up just because the company does well if it doesn't mean the company will pay out dividends.
But the company is worth more (in real terms, not just market cap) and stock is partial ownership, so there is a reason. Just look at it in terms of assets - Apple has a bunch of stores and other stuff they didn't own 10 years ago. That stuff has value, the stock represents a portion of that value.
You are right that a huge part of this is pretty irrational, though. Hell, look what happened when Steve Jobs was rumored to have had a heart attack.
This is a nice idea, but it's not immediately obvious it should mean anything. If someone owns 1% of a company they may theoretically own 1% of its assets, but if they can't practically make use of those assets for personal benefit then that value evaporates.
Say I'm the director of a company. I own all of its shares and am the one-member board. As chairman of the board I appoint the CEO (myself) and in tandem with said CEO I make all decisions regarding hiring and pay. My company pays no dividends, and I've made it clear that I will never sell more than 49% of the company.
Now, the 49% that I might sell technically confers partial ownership, but it gives no control, no dividends, no benefit of any kind.
Say my company only does one thing: It invests in Company2, my other business. Company2 is run in exactly the same way as the first company of mine. Now, say I was willing to sell you 49% of the first company, and my first company (me) was also willing to sell you 49% of Company2. You'd own nearly 75% of Company2, but you'd have no control over anything.
I could keep nesting companies inside other companies until you effectively owned 99.9% of the company that did the actual work, but that's completely irrelevant - even if the company was worth billions, there is no logical reason that the value of those shares should be correlated with the value of the company. They might as well be correlated with the weight of the CEO, though they should probably be worth nothing at all.
I'm pretty sure partial ownership is only worth anything when it is relevant to a credible possibility of controlling ownership.
When a company IPOs, ownership of that concern is split up into x pieces. The company has some amount of value, which is divided among the shares. As the company increases in value (hopefully), so do the shares. That is the reason why investing in a company is different than baseball cards. Baseball cards only appreciate in value due to changes in supply and demand, whereas a business can actively create value. There is no need to delve into weird counterfactuals or discursions on what the idea of partial ownership "means".
If a business's value can't be plausibly enjoyed by the shareholders, then the shares really are no more than baseball cards.
So far, the ways for a business's value to be enjoyed by the shareholders have been broken down to (a) dividends, (b) stock buybacks, (c) the ability to take control of the business, (d) the ability to sell stock to someone else attempting to take control of the business, and (e) claiming a share of the business's assets after dissolution.
(e) is right out--for a company that's doing well at all, their market cap is higher than the value of their assets less their liabilities, and a company doing poorly is certain to become insolvent before being dissolved. This is almost an intended feature of limited liability: the company can borrow itself to death, and the worst case scenario is that the stockholders get nothing.
(a) and (b) are stipulated as part of the original question--if the company doesn't issue dividends or buy back stock, of what value is the stock? Which leaves (c) and (d), which can be plausibly ruled out by having one intransigent party holding a majority share.
