3 weeks Why do people buy stocks of zero-dividend companies? Reddit      

Hi everyone,

Apologies if this is a very basic question but I tried searching around and didn't really get a satisfactory answer.

From what I know, people initially bought stocks of companies in the hopes that the company does well so that they get returns in the form of dividends. This causes the stock price to go up and people can sell their stock to get greater returns. If this is wrong, please correct me.

My question is, if companies do not pay out dividends, why would investors actually care about the stock of that company? Why care if the company does well IF you don't get anything out of it? Now, you might say that "the stock of the price goes up as the company does well, so you DO get something out of it", but why does that happen? If there is no direct reward from a company to its shareholders when it performs well, why would shareholders buy the stock in the first place, let alone hoping the stock price goes up?

I hope the question somewhat makes sense.

Would really appreciate some clarification on this.

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