taxpayers subsidize ceo pay

#77
#77
Vol423 said:
Are you serious? :blink: Do you really not understand why it is necessary to allow stock transactions other than simply for IPO's or secondary offerings?

Also, I'm sure this one's going to be a shocker for you, but cash proceeds from an IPO or secondary offering don't do squat for a company's bottom line either!
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Tell me how everyday stock transactions help a company


So what do ipo's do? Do they not raise money so the company can buy things? Does that not free up money that would've otherwise been spent buying those things?
 
#78
#78
rmsmith said:
Tell me how everyday stock transactions help a company


So what do ipo's do? Do they not raise money so the company can buy things? Does that not free up money that would've otherwise been spent buying those things?
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they do, I promise.

IPOs and secondary offerings raise money for any number of things, including buying stuff. It could free up capital or it could flat provide some not otherwise available.
 
#79
#79
rmsmith said:
Tell me how everyday stock transactions help a company
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They actually provide value to owning a company's stock without which a company would have to sell shares of stock in an IPO for CONSIDERABLY less money than they can obtain with the presence of a secondary market for stock transactions.

Example
Let's say that you pay $30/share for 1,000 shares of a company's stock that is actively traded on a major stock exchange (the secondary market DOES exist). You have purchased $30,000 worth of stock, but you have the ability to sell those shares to anyone at anytime for the prevailing market price at the time.

Without the existence of the secondary market, you would own $30,000 worth of a company's stock, but you would have no liquidity whatsoever. You wouldn't be able to sell it to anyone, so you can't get your cash back out. I assume that you would at least like to allow for a company to repurchase the shares privately, so maybe someday you would catch a break and the company would ask to repurchase your shares. Otherwise, you have to wait for someone to enter into a private transaction to buy the company in order for you to be able to get your cash back out. Companies aren't required to pay dividends, so you may never see a dime out of your initial investment. So how much are you now willing to pay for each of those 1,000 shares of the company's stock? The same $30 that you were previously willing to pay? I think not! The company would be lucky to get $0.03 for those shares.
 
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#80
#80
423, you're talking with someone who has never heard of an illiquidity discount.

rm, figure out how to become a minority shareholder in a private company stock and you'll begin to understand the value of a public market for a company's stock being of enormous value.
 
#81
#81
BigPapaVol said:
they do, I promise.

IPOs and secondary offerings raise money for any number of things, including buying stuff. It could free up capital or it could flat provide some not otherwise available.
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No question about ipo or secondary. But I don't see why someone should get a break if they buy stock at 50 and sell at 25. Like the disclaimers say, investment carries risk.
 
#82
#82
BigPapaVol said:
423, you're talking with someone who has never heard of an illiquidity discount.

rm, figure out how to become a minority shareholder in a private company stock and you'll begin to understand the value of a public market for a company's stock being of enormous value.
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Plus 1 million on that last point. This guys economic knowledge rivals LG
 
#83
#83
rmsmith said:
No question about ipo or secondary. But I don't see why someone should get a break if they buy stock from at 50 and sell at 25. Like the disclaimers say, investment carries risk.
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so you treat it as income one direction and not the other? If you want to retard investing, it's a great plan.

What's the difference in IPO or secondary stock and stock at 50?
 
#84
#84
rmsmith said:
No question about ipo or secondary. But I don't see why someone should get a break if they buy stock at 50 and sell at 25. Like the disclaimers say, investment carries risk.
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If they have to pay tax on the reward, why shouldn't they get a break on the loss?
 
#85
#85
Vol423 said:
They actually provide value to owning a company's stock without which a company would have to sell shares of stock in an IPO for CONSIDERABLY less money than they can obtain with the presence of a secondary market for stock transactions.

Example
Let's say that you pay $30/share for 1,000 shares of a company's stock this is actively traded on a major stock exchange (the secondary market DOES exist). You have purchased $30,000 worth of stock, but you have the ability to sell those shares to anyone at anytime for the prevailing market price at the time.

Without the existence of the secondary market, you would own $30,000 worth of a company's stock, but you would have no liquidity whatsoever. You wouldn't be able to sell it to anyone, so you can't get your cash back out. I assume that you would at least like to allow for a company to repurchase the shares privately, so maybe someday you would catch a break and the company would ask to repurchase your shares. Otherwise, you have to wait for someone to enter into a private transaction to buy the company in order for you to be able to get your cash back out. Companies aren't required to pay dividends, so you may never see a dime out of your initial investment. So how much are you now willing to pay for each of those 1,000 shares of the company's stock? The same $30 that you were previously willing to pay? I think not!
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So they indirectly help. I see. I have no problem with the market, just the tax breaks for people that make bad decisions
 
#86
#86
rmsmith said:
So they indirectly help. I see. I have no problem with the market, just the tax breaks for people that make bad decisions
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So then you agree we should end welfair for unwed mothers, public support for drug addicts ext.
 
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#87
#87
rmsmith said:
So what do ipo's do? Do they not raise money so the company can buy things? Does that not free up money that would've otherwise been spent buying those things?
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Your previous post said that secondary market transactions don't do anything for a company's bottom line. I stated that neither do cash proceeds from an IPO. That is a fact. The bottom line means net income. Cash proceeds from an IPO are not recorded as revenue, so they have no effect on net income (the bottom line). The cash proceeds are recorded as equity, and it does obviously improve the cash position of a company. It just doesn't do anything for the bottom line other than potentially earn interest or provide cash that can be used to buy other assets that could potentially produce revenue. Oh, and by the way, good luck ever floating an IPO with the explanation that you're going to hold the cash in the bank to earn interest on it!
 
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#88
#88
BigPapaVol said:
423, you're talking with someone who has never heard of an illiquidity discount.
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No kidding. Rather than take a number of classes, this guy comes hear and makes ridiculous statements. Then he gets a free education as several of us explain to him how things really work.
 
#89
#89
rmsmith said:
So they indirectly help. I see. I have no problem with the market, just the tax breaks for people that make bad decisions
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They indirectly help? Sure, if by indirectly help you mean they provide a means for companies to gain access to capital. Without the secondary market nobody would place any value on equity shares issued in an IPO. Therefore, IPO's basically wouldn't ever happen. Companies would have to try to get private investors to invest in their companies (good luck with that!), or they would have to take on debt rather than issue equity shares.
 
#91
#91
Vol423 said:
They indirectly help? Sure, if by indirectly help you mean they provide a means for companies to gain access to capital. Without the secondary market nobody would place any value on equity shares issued in an IPO. Therefore, IPO's basically wouldn't ever happen. Companies would have to try to get private investors to invest in their companies (good luck with that!), or they would have to take on debt rather than issue equity shares.
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Again my problem isn't with the market. Its the tax breaks they get when they lose money. Investing firms tell them in their disclaimers that investing carries risk.
 
#92
#92
rmsmith said:
Again my problem isn't with the market. Its the tax breaks they get when they lose money. Investing firms tell them in their disclaimers that investing carries risk.
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How is it a tax break when income is reduced?
 
#95
#95
hog88 said:
What cash?? Small start ups generally don't have cash just laying around, and it's extreamly hard to get a LOC within the first 12 months of buisness.

I didn't assume anything, it's obvious you have always been an employee and not a principle.
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sure you assumed, i've never told you if i've ever ran a business or not. You may think you know the answer. but you can not state that you know for sure.
 
#100
#100
Anyway. I'm out. Other than giving reasons why i should think differently people just resort to more assumptions.
 
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