Re:The stockmarket is now run by computers, algorithms and p...
by paulgb on Monday October 14, 2019 @02:33PM
(#21251321)
When a start-up is privately held, they might raise a round of funding to grow their team. Investors get a piece of the company, the employees get paid, and the company gains an employee at the cost of diluting their equity.
When a publicly traded company wants to grow, they can give the employee stock. The employee can turn around and sell the stocks on the market. As above, investors get a piece of the company, the employee gets paid, and there are more outstanding shares.
I'm not OP but I think their point was that the two cases are not so different. The line between what is "trading" and what is "investing" is not so easy to draw.
When a publicly traded company wants to grow, they can give the employee stock. The employee can turn around and sell the stocks on the market. As above, investors get a piece of the company, the employee gets paid, and there are more outstanding shares.
I'm not OP but I think their point was that the two cases are not so different. The line between what is "trading" and what is "investing" is not so easy to draw.