Well no one would buy in at IPO time if they thought it was some kind of pump and dump scheme (of course this does happen, but is hopefully rare). An IPO is generally designed to raise cash that will be invested back into the business, and as a side effect give the investors a return.

yeah for the banks that underwrote the IPO and dumped the shares on your mom's pension plan.

the liquidity of the secondary stock market is a purely American phenomenon.

> the liquidity of the secondary stock market is a purely American phenomenon.

What do you mean by that? Loads of countries have adequately liquid stock markets.

Exactly what I wrote, the liquidity is crap. Adequate? It's just down hill

That's actually not how underwriting works. If an IPO is a flop right out the gate sometimes the bank can get stuck with the shares.

That's the risk they take on. I listen to retail investors, they clamor for IPOs no matter what the S-1 says.

in fact companies can cash out and remain private. private placement or selling the company are two big alternatives, and there are others.

Not 100% of companies have been choosing those options, however the # of US IPOs is lower now than it has been: https://www.quandl.com/data/RITTER/US_IPO_STATS-Historical-U...