News for hackers. Stuff that matters.

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 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?

[ Parent | on HN ]
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.

[ Parent | on HN ]