From: GBurch1@aol.com
Date: Thu Mar 01 2001 - 05:31:14 MST
In a message dated 2/22/01 3:50:36 PM Central Standard Time,
brian@posthuman.com writes:
> Of course remember: if you really intend on /helping/ the companies in
> question, you have to invest during the IPO or before. Otherwise your
> cash is just going to some other random person/org, not the company itself.
Actually, this isn't true in almost all cases. First, the entrepreneurs who
start and build the company almost always retain some fairly significant
portion of the stock of the company. So 1) you may be buying the stock
directly from such an "insider", thus providing a direct return to the people
who's energy and inventiveness you want to reward and 2) even a purchase from
a non-insider serves to support the stock price, providing an indirect
benefit to those people. Second, companies often possess "treasury stock",
i.e. "issued" stock that hasn't yet been sold to the public. Such shares
serve as a kind of private currency for the company that they use to both
raise cash and regulate the market value of their equity. Finally, as I
point out above, every purchase of a company's shares serves to support its
value, which is a continuing issue for any company. Buying XYZ, Inc.'s stock
today may be helping it to raise new money, by serving as a signal of its
value to new direct investors or lenders.
Greg Burch <GBurch1@aol.com>----<gburch@lockeliddell.com>
Attorney ::: Vice President, Extropy Institute ::: Wilderness Guide
http://www.gregburch.net -or- http://members.aol.com/gburch1
ICQ # 61112550
"We never stop investigating. We are never satisfied that we know
enough to get by. Every question we answer leads on to another
question. This has become the greatest survival trick of our species."
-- Desmond Morris
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