European Tribune - Comments - Do we really need stock markets???

Do we really need stock markets??? | 110 comments (110 topical, 0 editorial, 0 hidden)

Re: Do we really need stock markets??? (none / 0)

There has been a lot written about what an insider scam the IPO is. The company that arranges the IPO makes certain that their clients are able to sell some of their stock at a price that will not again be seen for some time and that other favored insiders get to buy at the initial price and quickly sell at the short lived top. The public gets access at that top and gets to hold the stock until it regains those levels -- if it does. Meanwhile, founders and insiders get to cash out. People complain, but nothing gets done.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Aug 26th, 2010 at 10:18:06 PM EST
[ Parent ]

Re: Do we really need stock markets??? (4.00 / 2)

There's a really simple solution here, which I use. Never participate in IPO's where the current owners cash out. If it was such a good investment they wouldn't sell their shares to you, would they?

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Fri Aug 27th, 2010 at 10:43:24 AM EST
[ Parent ]

Re: Do we really need stock markets??? (4.00 / 2)

In the US IPOs are the preferred way for Venture Capital firms to unload their 'stake' and take a profit. It is also a way for the principals of the company to get a 'pay-back' for the work they've done. Third, it is almost the only way, in the US, employees of the company actually get some economic benefit of the work they've done in relation to the "wealth" or "value" they've produced. Somewhere down in the basement is getting money for the company to invest in current and future operation(s).

Have to be a damn fool to buy into an IPO but there seems to be plenty of damn fools running around ... and we know what happens to their money!

by ATinNM on Fri Aug 27th, 2010 at 11:24:14 AM EST
[ Parent ]

Re: Do we really need stock markets??? (none / 1)

There sure is a way to get economic benefit for the work they've put in: sit on the shares and accumulate dividends, and when the company looks over-valued, start selling off your shares.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Fri Aug 27th, 2010 at 02:12:14 PM EST
[ Parent ]

Re: Do we really need stock markets??? (none / 0)

In the US new companies don't pay dividends.

by ATinNM on Fri Aug 27th, 2010 at 08:17:53 PM EST
[ Parent ]

Re: Do we really need stock markets??? (none / 0)

Neither do companies around here, not when they're start-ups. But after a few years when the cash flows heads to reasonable levels and the initial debt burden has been reduced, there'll be a surplus available for dividends.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Sat Aug 28th, 2010 at 10:53:28 AM EST
[ Parent ]

Re: Do we really need stock markets??? (none / 1)

Dividends in the US are beside the point. Microsoft only started paying them in 2003 when they had, from memory, about $30 billion sitting around in their bank accounts.

US stock markets operate under the Greater Fool Theory.

by ATinNM on Sat Aug 28th, 2010 at 12:35:00 PM EST
[ Parent ]

Re: Do we really need stock markets??? (none / 0)

As far as I know, the handful of US companies I have shares in all pay dividends.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid (arvid.hallen at gmail.com) on Sat Aug 28th, 2010 at 12:48:43 PM EST
[ Parent ]

Do we really need stock markets??? | 110 comments (110 topical, 0 editorial, 0 hidden)

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