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Nice try, but the logic doesn't quite cement. Overvaluations are fueled by hype that's resultant from scarcity. Facebook is so "hot" right now because the ave
by shawnee_ 15y ago
Nice try, but the logic doesn't quite cement. Overvaluations are fueled by hype that's resultant from scarcity. Facebook is so "hot" right now because the average person can't get a piece of the pre-IPO value. Upon the IPO the scarcity is decreased, but by then, a lot of the value has already been extracted and returned to the high tier investors.
The JOBS Act is going to be awesome for startups and entrepreneurs. Any company that has even an infinitesimal chance of becoming a publicly traded company will be able to attract investors (few or many) to raise money and grow. And as that company raises money and becomes more prominent on the radar, those who got in early will realize a greater return.
It's going to create an incentive for investors to seek out and invest in the obscure. Not to mention, it'll likely create an ancillary benefit: reducing the cost of IPO-ing.
- skylan_q 15y agoI wouldn't dismiss it that easily. Legislation like this helped to fuel speculation on real estate. The average person became an investor in a specific asset class. The JOBS act could do the same thing with start-ups. The potential benefits you mention will probably materialize. But seeing as this is an economic issue, we have to look for what the tradeoff is.
- jorgem 15y ago>> The average person became an investor in a specific asset class. I don't know... "average" people could buy houses. I think it's when you push it out to the edge so everyone gets involved, then you have problems. Currently, "average" people can't even do these investments. Probably, won't be so bad, unless it becomes a bubble.