It’s not clear to me what makes people who encounter financial markets mostly through Vanguard target-date retirement funds and drive-by encounters with the Wall Street Journal or CNBC think they should opine so freely. Then again, that sort of Hey Look Me Offer Opinion doesn’t stop anyone in other domains — just listen to recent retirees offer each other healthcare advice the next morning you’re in a Starbucks — so perhaps I shouldn’t be surprised.
As I write here too often, people don’t understand the systemic consequences of borked (or successful, for that matter) initial public offerings.
- It isn’t just about the shareholders. But that matters.
- It isn’t about the private investors in that company. But that matters.
- It isn’t about the prospective public investors in that company. But that matters.
- It isn’t about the underwriters. But that matters.
- It isn’t about the valuation of similar public or private companies. But that matters.
It’s about a system, a Great Money Machine that grinds up money being used for one thing and funnels it to other things. When an offering fails, money goes other places. Public institutions were selling Thing X to generate cash to use for buying the new Y, so they can now buy back X, or buy a Z, or whatever. And to the extent they depressed prices in somethings, that will stop. At the same time, companies that had planned to buckets of post-IPO money — underwriters, the company itself, etc. — now don’t have that money so that don’t get to do that. The money stays elsewhere in the system, and almost certainly won’t be spent for similar purposes.
The list is very long, and grows longer and more material the larger the IPO is that didn’t happen. Thinking of it narrowly — all other companies using software and heavy capital expenditures to try and brand themselves as tech companies with tech valuations will suffer, but, hey, there aren’t others of those, so we’re good — is silly and a gross misunderstanding of how the Great Money Machine of markets works.
Here are some papers worth reading:
- Can the snapping sound discriminate true from false penile fractures?
- Adverse events of exercise therapy in randomised controlled trials: a systematic review and meta-analysis
- Muscle Mass Index As a Predictor of Longevity in Older Adults
- Outcomes of Hip Arthroscopic Surgery in Adolescents With a Subanalysis on Return to Sport: A Systematic Review
- Comorbidities in the first 2 years after arthroscopic hip surgery: substantial increases in mental health disorders, chronic pain, substance abuse and cardiometabolic conditions
- A comparison of deep learning performance against health-care professionals in detecting diseases from medical imaging: a systematic review and meta-analysis
Science & Technology
- Troubling Trends in Machine Learning Scholarship
- Posture control in land plants: growth, position sensing, proprioception, balance, and elasticity
- “Tempus Divitiae”: Locomotion orientation and evaluation of time as a precious resource
- An Automatic Car Accident Detection Method Based on Cooperative Vehicle Infrastructure Systems
- Ball possession: record figures in 35 European leagues
Economics & Finance
- Intoxicants and the invention of ‘consumption’
- The Hedge Fund Billionaire’s Guide to Buying Your Kids a Better Shot at Not Just One Elite College, but Lots of Them
- The farming-inequality nexus: new insights from ancient Western Eurasia
- FinTech, BigTech, and the Future of Banks
- Propaganda, Conspiracy Theories, and Accountability in Fragile Democracies