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A comment on What happens when a culture is driven by the need for money to make more money. Parent comment

Re:What happens when a culture is driven by the need for mon... by aleh on Wednesday November 11, 2015 @03:24PM (#10549014)
The cash one exchanges for shares of a public company is usually spent on paying wages, buying equipment, funding R&D etc, thus enabling future growth.

If one happens to invest into the inefficient company in a long term it is going to be bust along with investor.

How comes this is not productive?

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Re:What happens when a culture is driven by the need for mon... by jonknee on Wednesday November 11, 2015 @04:27PM (#10549408)
When you buy a share of SPY you're not paying that cash to all the S&P 500 companies, you're paying it to another party that already has a share of SPY. IPOs give money to companies, but trading shares between parties does nothing for the company and contributes $0 to wages, equipment, R&D, etc.

I own shares of SPY, if I sell them to you what exactly changes?

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Re:What happens when a culture is driven by the need for mon... by refurb on Wednesday November 11, 2015 @08:38PM (#10550752)
Yes, the cash doesn't go directly from you to the company, but you're creating a market by which a company can raise funds through a stock offering.

Take away the market and the company wouldn't get any money.

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