initial public offering I think. people can buy stocks, it becomes a publicly traded company, they become beholden to stockholders and more likely to adopt destructive patterns to monetize the site to make shareholders’ pockets happy
A company can be privately traded or publicly traded.
The privately traded company may have shares just like a public company, but can’t be traded on stock exchanges. This limits the amount of movement since there isn’t a common place to trade, and there’s a lot of big money that lives exclusively on the exchanges.
In order to become a publicly traded company, first you need to follow a bunch of rules including a bunch of new reporting rules so a private company becomes much more open about its finances and the like, and then it does an Initial Public Offering, hoping to for example sell 10 million shares at 10 dollars each for a 100 million dollar valuation.
These are usually sold to certain folks who are understood are taking the risk because the proposed price is effectively a guess. In some cases they end up winning big like when the original google stock was as I recall 35 dollars a share, but in other cases they buy the stock and it turns out that the price is actually way lower.
Initial Public Offerings used to be a way to increase the money a company has for stuff like expansion. For example, let’s say you had a pretty good paper factory but you wanted to raise a bunch of money so you could install new machines, hire admin staff, and overall continue the growth journey of your company. You’d do an IPO and take the money to do those things and continue to become a larger company doing more good stuff. The primary owners would try to retain most of the ownership of the company because the end point isn’t the IPO, that’s just the beginning of the next chapter.
Today, Initial public Offerings are used as a way for founders in silicon valley to “cash out”, where they take the large ownership stake they used to have and sell it on the open market and take their effectively imaginary paper wealth and turn it into real money they can have and spend or invest in something else. Because there’s so much money in the stock market in part due to stuff like pension funds and 401(k)s, there’s a lot more chance for a good company to rise a lot in value compared to its value as a private company.
pardon my retardation, but what is an IPO?
initial public offering I think. people can buy stocks, it becomes a publicly traded company, they become beholden to stockholders and more likely to adopt destructive patterns to monetize the site to make shareholders’ pockets happy
Ahhh, ok, I see
A company can be privately traded or publicly traded.
The privately traded company may have shares just like a public company, but can’t be traded on stock exchanges. This limits the amount of movement since there isn’t a common place to trade, and there’s a lot of big money that lives exclusively on the exchanges.
In order to become a publicly traded company, first you need to follow a bunch of rules including a bunch of new reporting rules so a private company becomes much more open about its finances and the like, and then it does an Initial Public Offering, hoping to for example sell 10 million shares at 10 dollars each for a 100 million dollar valuation.
These are usually sold to certain folks who are understood are taking the risk because the proposed price is effectively a guess. In some cases they end up winning big like when the original google stock was as I recall 35 dollars a share, but in other cases they buy the stock and it turns out that the price is actually way lower.
Initial Public Offerings used to be a way to increase the money a company has for stuff like expansion. For example, let’s say you had a pretty good paper factory but you wanted to raise a bunch of money so you could install new machines, hire admin staff, and overall continue the growth journey of your company. You’d do an IPO and take the money to do those things and continue to become a larger company doing more good stuff. The primary owners would try to retain most of the ownership of the company because the end point isn’t the IPO, that’s just the beginning of the next chapter.
Today, Initial public Offerings are used as a way for founders in silicon valley to “cash out”, where they take the large ownership stake they used to have and sell it on the open market and take their effectively imaginary paper wealth and turn it into real money they can have and spend or invest in something else. Because there’s so much money in the stock market in part due to stuff like pension funds and 401(k)s, there’s a lot more chance for a good company to rise a lot in value compared to its value as a private company.
Thanks for explaining that. It makes sense. Is the reddit ceo trying to like, take his share and leave?
It’s likely. I don’t know if reddit makes it through the next recession otherwise. I mean, what does it do?
You’ve never used reddit?
I mean from a business standpoint. Explain why anyone would spend money on this thing?
There isn’t that much money to be made on “thanks for le reddit gold, kind stranger!”
That’s true I don’t think anyone is using it as of now anyway either