Not only is this not going away, but it provides the most asymmetric return on almost any bet that a company can make right now.
And most Average Joes have no idea why that is, because they are completely ignorant to how traditional market IPOs are structured. They never wonder why a Facebook doesn't begin life trading on the NASDAQ at $0.01/share instead of $20/share.
Q: Why does a company like Facebook not do a 10,000X, 1000X or even a 100X this many years after launch? And the early investing public gets to benefit from such a move in the price?
A: Because the 10,000X in Facebook stock
already happened pre-IPO. It was stolen away from the Average Joe public by the founders, initial *wealthy* investors, wealthy hedge fund managers and investor banks. These are all people who had nothing to lose and everything to gain because they were already wealthy. They end up with 99.99999999% of the shares before public trading launch. What ends up trading on the public market float is a pitiful, minuscule amount compared to the sum total...a drop in the bucket.
THIS is why the wealthy are getting wealthier while the average and poor get poorer. They (Average Joe) are being shut out from being able to invest in early rounds of Tech companies and being able to benefit/profit by owning massive amounts of shares pre-IPO for little investment, like the rich can.
Rich people can go onto Dragons Den and buy the company for 50% of the money.
While poor people just have to drink in the queen vic.
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