By this criteria, would not every middle class person with a investment portfolio containing common stocks count as a speculator?
In fact, who but a speculator or insider of some sort can buy tasty securities at time of issue?
A shareholder can choose to sell on his/her right to buy those additional shares, but only these "leftovers" make their way to sale, and not necessarily to the public. They might be sold to institutional investors in a job lot, for instance. The same often happens when new equity is issued without going down the rights route: the shares are often placed directly with big investors and are not offered to the public.
it's a lot easier for a company to issue 1,000,000 shares each to four investors than sell 4,000,000 shares in blocks of 500
In theory, the money managed by the institutional shareholders belongs to the voting public. Pension schemes, annuities, endowment policies, share ISAs, etc etc etc...
But I know you know this, so are we at cross purposes over definitions?
if there's nothing but institutional shareholders, why do we pretend that the interests of shareholders somehow intersect with the interests of the voting public?
I took "interests" to mean "the desire/need for security of and return on savings" and the "voting public" to mean "average citizens". So my reply was, I thought, the practical point that most people do have interests that rely directly on the performance of shares, even if, legally, they're a step away from being shareholders themselves.
(That doesn't, obviously, make the current system any less rotten. More so, if anything. But I don't think there is really any "shareholder class" separate from the rest of us whose genuine interests lie in an unsustainable fast buck. Apart from bonus-driven fund managers, that is.)
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
