3 ms·

"where their skills were not producing anything" If this is the case why do so many companies seek going public?

by kyle_v 7y ago

rswail 7y ago
Becoming a public company is a way to get equity investment. That is the purpose of the stock market. It was the original purpose of "investment banks" as opposed to "retail banks". However, that is not what the bankers of Wall Street now focus on, they are more involved in producing "financial products", packaging arcane structures primarily to encourage trading and thus fees from mindless turnover.
- sailfast 7y ago
  Packaging arcane structures and securitizing them has a huge impact on overall risk in the market and enables pretty significant cost reductions downstream (generally) in the markets that can offload the risk via the security. I understand there are bad actors as well as people making the trades that make money, but there is also an underlying reason the trades get made, typically that is often discounted by your argument and should be factored in. The reason we can click a button and get a loan is because it is not extremely risky for the company to make the loan, because of said instruments (as an example)
aswanson 7y ago
There is a bloat of capital seeking any and all possibility for growth. Even money-destroying companies are going public because growth-chasing has become so desperate.
MiroF 7y ago
"If this is the case why do so many companies seek going public?" Do you think the majority of people working in Wall St are involved in IPO value creation?
tossaway1717 7y ago
Do they? ==About 3,600 firms were listed on U.S. stock exchanges at the end of 2017, down more than half from 1997.== https://www.bloomberg.com/opinion/articles/2018-04-09/where-have-all-the-u-s-public-companies-gone https://www.bloomberg.com/opinion/articles/2018-04-09/where-...

3 ms·

"where their skills were not producing anything" If this is the case why do so many companies seek going public?

by kyle_v 7y ago

"where their skills were not producing anything" If this is the case why do so many companies seek going public?

rswail 7y ago
Becoming a public company is a way to get equity investment. That is the purpose of the stock market. It was the original purpose of "investment banks" as opposed to "retail banks". However, that is not what the bankers of Wall Street now focus on, they are more involved in producing "financial products", packaging arcane structures primarily to encourage trading and thus fees from mindless turnover.
- sailfast 7y ago
  Packaging arcane structures and securitizing them has a huge impact on overall risk in the market and enables pretty significant cost reductions downstream (generally) in the markets that can offload the risk via the security. I understand there are bad actors as well as people making the trades that make money, but there is also an underlying reason the trades get made, typically that is often discounted by your argument and should be factored in. The reason we can click a button and get a loan is because it is not extremely risky for the company to make the loan, because of said instruments (as an example)
aswanson 7y ago
There is a bloat of capital seeking any and all possibility for growth. Even money-destroying companies are going public because growth-chasing has become so desperate.
MiroF 7y ago
"If this is the case why do so many companies seek going public?" Do you think the majority of people working in Wall St are involved in IPO value creation?
tossaway1717 7y ago
Do they? ==About 3,600 firms were listed on U.S. stock exchanges at the end of 2017, down more than half from 1997.== https://www.bloomberg.com/opinion/articles/2018-04-09/where-have-all-the-u-s-public-companies-gone https://www.bloomberg.com/opinion/articles/2018-04-09/where-...