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> It wouldn't know about anything non-public, would it? Why? Then how would be all your stealth companies supposed to raise enough money in the first place? Or
by littlestymaar 2y ago
> It wouldn't know about anything non-public, would it?
Why? Then how would be all your stealth companies supposed to raise enough money in the first place? Or attract customers?
In practice most companies are publicly known as early as series A at least and remaining unnoticed for longer requires lots of effort that would definitely hamper the growth of such companies.
And the market definitely takes rising competitors, even private, into account when assessing the financial prospect of existing public companies.
- robertlagrant 2y agoNon-public companies don't advertise investment opportunities uniformly to the entire market of investors the way a public company does.
- littlestymaar 2y agoEMH is about markets factoring in all available information, not just “uniformly advertised investment opportunities”.
- robertlagrant 2y agoBut not all information is available to the whole market. Otherwise fully private startups would also fall under it, as, well, the employees know the information, so it's technically "available". That definition of EMH seems to be what's causing this idea that innovation in new companies is impossible, rather than the general idea that asset prices reflect available information. Some information is not available, and that won't be reflected in prices. That's all.