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How does the stock market provide liquidity after the IPO? Companies selling their own shares?
by Kiro 3y ago
How does the stock market provide liquidity after the IPO? Companies selling their own shares?
- notahacker 3y agoCompanies are, in fact, permitted to sell additional tranches of shares after IPO. More to the point the IPO is liquidity, and shareholders are rewarded for the use of that liquidity to grow a business that sells actual goods and services to the public. Shareholders can make money from dividends paid by those profits, not just finding someone else to sell the share to
- pfisch 3y agoMany stocks pay no dividends.
- BaseballPhysics 3y agoEh, these days in the US they're bought back instead. Money still gets returned to shareholders, it's just more tax efficient and the gains aren't realized until the equity is sold.
- pfisch 3y agoToken creators can buy back tokens...
- notahacker 3y agoSure, but the shareholders legally own the R&D centre the company invests in instead or the massive pile of cash they sit on, and the companies can pay dividends, as soon as company management decides this would be the best uses of a company's assets (or the shareholders vote to remove them for someone that does). Cryptographic tokens can't pay dividends and don't have any other sort of claims attached to them, the only possible way to extract any sort of value whatsoever is by finding someone else that wants to buy or borrow the token itself.