4 ms·

This. The public mkt used be the source of capital for companies like Facebook. Now it’s all private until most of the growth juice is squeezed out and now the

This. The public mkt used be the source of capital for companies like Facebook. Now it’s all private until most of the growth juice is squeezed out and now the public mkt is a liquidity event for the private investors. If/when they want to...

ricardonunez 8y ago
Isn't that because there a more wealthy individuals and many of them are connected to the same network?
chiefalchemist 8y ago
Just the same, pub mrkts used to be about companies and investing. Now they're just datasets to be milked and manipulated by quants, automated trading, etc. Perhaps the better conclusion of the NYT article should have been that these markets no longer carry the economic significance they once did?
nugget 8y ago
Facebook is up almost 500% from its IPO price, so even the very smart private equity and venture folks can misjudge when an opportunity has been completely milked.
- mattnewton 8y ago
  You’re in agreement with gp- he’s saying that an IPO used to be an opportunity like facebook, but now they just stay private like Uber until they believe most of the value is locked in.
- ataturk 8y ago
  True, but we're talking overall trends here, not just one FANG stock. Overall, private equity and big institutions have learned that they can fund companies and receive all the gains without ever dealing with the SEC or the general public. It's definitely a part of the story about the "rich getting richer." I'm a multi-millionaire right now, but I don't hold a candle to the wealth of even the CEO of the company I work for and I definitely don't hold a candle to the billionaires we love to talk about. My entire net worth is a rounding error for them! That is how insane the wealth imbalance has become and I say this as a "wealthy" libertarian-minded person. Reagan's trickle down was a lie. And while wealth is not a zero-sum game, it is certainly true that some wealthy people have a lock on wealth creation via their connections and their power position, which is something aspirant individuals such as myself will never have access to.
- scottlu2 8y ago
  Another reason to go public is because the SEC forces companies with 2000 stock owners (used to be 500 pre-2012) to file public disclosure documents similar to being public, so companies typically go public at that point. I’ve heard that some work around this limit by issuing IOUs indexed to the stock price. https://www.investopedia.com/terms/5/500-shareholder-threshold.asp https://www.investopedia.com/terms/5/500-shareholder-thresho...
  - woolvalley 8y ago
    You also can give RSUs, which don't actually become owned by the recipient until the company is acquired or become public. No fancy IOUs required. This IOU is denominated in stock units instead of a cash price.

ricardonunez 8y ago

Isn't that because there a more wealthy individuals and many of them are connected to the same network?

chiefalchemist 8y ago

Just the same, pub mrkts used to be about companies and investing. Now they're just datasets to be milked and manipulated by quants, automated trading, etc. Perhaps the better conclusion of the NYT article should have been that these markets no longer carry the economic significance they once did?

nugget 8y ago

Facebook is up almost 500% from its IPO price, so even the very smart private equity and venture folks can misjudge when an opportunity has been completely milked.

mattnewton 8y ago
You’re in agreement with gp- he’s saying that an IPO used to be an opportunity like facebook, but now they just stay private like Uber until they believe most of the value is locked in.
ataturk 8y ago
True, but we're talking overall trends here, not just one FANG stock. Overall, private equity and big institutions have learned that they can fund companies and receive all the gains without ever dealing with the SEC or the general public. It's definitely a part of the story about the "rich getting richer." I'm a multi-millionaire right now, but I don't hold a candle to the wealth of even the CEO of the company I work for and I definitely don't hold a candle to the billionaires we love to talk about. My entire net worth is a rounding error for them! That is how insane the wealth imbalance has become and I say this as a "wealthy" libertarian-minded person. Reagan's trickle down was a lie. And while wealth is not a zero-sum game, it is certainly true that some wealthy people have a lock on wealth creation via their connections and their power position, which is something aspirant individuals such as myself will never have access to.
scottlu2 8y ago
Another reason to go public is because the SEC forces companies with 2000 stock owners (used to be 500 pre-2012) to file public disclosure documents similar to being public, so companies typically go public at that point. I’ve heard that some work around this limit by issuing IOUs indexed to the stock price. https://www.investopedia.com/terms/5/500-shareholder-threshold.asp https://www.investopedia.com/terms/5/500-shareholder-thresho...
- woolvalley 8y ago
  You also can give RSUs, which don't actually become owned by the recipient until the company is acquired or become public. No fancy IOUs required. This IOU is denominated in stock units instead of a cash price.