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This is true; the market enables the hostile takeover, and yes more stock can be issued to raise more money and the current price will be some kind of guide as to what it is worth.

But, someone who buys stock and then wishes to sell it, has to sell it back to the “market” and not to the company that issued it. Redemption value of the stock rests on the “bets” and not necessarily on the horse’s performance.

HiTech RedNeck said: "Redemption value of the stock rests on the “bets” and not necessarily on the horse’s performance."

I don't agree. Many of the stocks I own have "price to earnings ratios" in the neighborhood of twelve; in other words, the company expects to earn one dollar for every twelve dollars of stock price.

It is certainly a "bet" in that one can not be certain that the company will earn that dollar, but after decades of successfully doing so, it is not a bet without some evidence to believe that the earnings will appear.

Amazon stock today shows a price-to-earnings ratio of 540. That means that the expected earnings might only be one dollar for every 540 dollars of stock price. Those buying such stock are "betting" that Amazon will continue growing and being successful at taking market share from such businesses as JC Penney, Sears, K-Mart, etc. If you have been to these stores lately, you might convince yourself that Amazon will continue to prosper.

You can compare buying stocks to betting on horses, but there is a lot more information available about the average company which can be predictive of future performance than I would expect to see regarding any horse.

HiTech RedNeck said: "But, someone who buys stock and then wishes to sell it, has to sell it back to the “market” and not to the company that issued it."

This isn't always true. Some companies become convinced that the "bets" are too low. If the company has accumulated a lot of cash, they can raise the value of their stock by buying up shares at market prices, thus increasing the value represented by the remaining shares.

Many of the most successful companies recently are sitting on huge piles of cash and no really great ideas about how to put it to work. I believe that there are tax consequences to declaring cash dividends that are avoided by using stock buy backs to increase shareholder value.

Since I am in retirement, I am growing more fond of stocks with regular dividends. One company I invested in has a price-to-earnings ratio of about twelve and a yearly dividend of 3.5%. This means that I will make 3.5% on my money even if they don't manage to increase the share value.