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Of course I can ignore the indirect influence; if the company had no actual value at IPO its share price would plummet. Also, by definition the S&P 500 only inc

Of course I can ignore the indirect influence; if the company had no actual value at IPO its share price would plummet. Also, by definition the S&P 500 only includes companies which have had 4 consecutive quarters of positive GAAP earnings, so the shares would have value on the public markets. Specifically, they'd have to have enough value to be among the 500-or-so largest positive-earnings companies by market capitalization. Hardly value that can be attributable to indirect influence of an index fund.

icebraining 10y ago
You're looking at it too statically, and ignoring the full ecosystem. If I'm an investor that buys at IPO time, how many companies am I willing and able to invest in if I have to wait for the profits to come in through yearly dividends? And so, if I'm a VC, how many companies am I willing and able to invest in if the IPO market is much smaller? And so, if I'm an entrepreneur, how many companies can I found and create value from if I have very little chance of selling them off? The index funds are the terrain that sustain the "wealth creators".