The primary market works in part because there is a secondary market. It would be a lot harder to raise the initial capital if the initial investors wouldn't ha

The primary market works in part because there is a secondary market. It would be a lot harder to raise the initial capital if the initial investors wouldn't have the prospect of unloading their shares to the public. That doesn't mean I buy into the myth of the stock market as an efficient allocator of capital, though. For one, it isn't efficient. For another, if you look at e.g. AAPL a huge amount of capital is sunk into the stock, while the company doesn't know what to do with all the money it is generating. Post-IPO, companies can also raise additional capital by issuing more shares (either to the public or by e.g. issuing RSUs to employees). Only in those cases is the stock price relevant. Otherwise, the market can be mispricing a stock without any bearing on the functioning of the company.