“Why did we allow so many unprofitable companies IPO? When did losing money become acceptable and the new normal for publicly traded companies?” First off, the

“Why did we allow so many unprofitable companies IPO? When did losing money become acceptable and the new normal for publicly traded companies?” First off, the SEC “allows” companies to go public in the US. Any company can do so, assuming you meet the regulatory requirements. Being profitable is not one of them. Being transparent enough on their business and their outlook _is_ one of them. Now, when you go public, you take on a bunch of additional constraints - like having to report regularly to shareholders, that private companies don’t have to do. So now, the question should be “why did investors invest their own cash into unprofitable companies IPO’ing?” The answer partially lies into how profitable companies typically do not IPO, as they do not need capital. Want to be a part of IKEA? Not a public company? The Mars Group, who sell most candies worldwide? They are also doing great. LEGO? Nope. Okay, so you have investors - pensions funds, private individuals and many others - who want to invest, and gain returns on their money. So why do they invest in no -profitable companies? Because they think it’s an investment that they are comfortable with. And they usually believe that short- or long-term, their stock value will go up, thanks to the performance of the company. Welcome to how publicly traded markets work.