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"Ponzi relied on lying to the investors and telling them the money came from good investments." It seems like a more crucial aspect of a Ponzi scheme is that y
by jeffdavis 15y ago
"Ponzi relied on lying to the investors and telling them the money came from good investments."
It seems like a more crucial aspect of a Ponzi scheme is that you tell new investors that their money will go into the business, when in reality it's just paying old investors.
So, did the investors who put in a billion dollars realize that most of it was going to old investors?
- senorprogrammer 15y agoI think it's generally accepted that yes, they knew where their investment was going. It would have been incumbent on an IPO, in which scenario they then hand off their stake in the company to the public with the expectation of making first-day LinkedIn profits. If Groupon does go through with its IPO, expect those new investors to dump hard on day 1.
- allantyoung 15y agoInside investors (those who invested pre-IPO) cannot "dump hard on day 1." In all IPO cases, insiders have a lockup period, generally between 60-90 days before they can sell any stock whatsoever. The only stock being "dumped" is the block of stock being sold in the IPO.