Yes. Yes. That's not the question. The question is why does an insider who is intimately familiar with all the details of the business and has been following it since it started values it so much less than Joe Plumber who is clueless and buying it today on the stock market. If Twitter is such a good business why would I as an owner want to part with it? What is it going to be doing with the cash it raised?

As Warren Buffer says, in the short term the stock market is a beauty contest. So yeah, Twitter is very beautiful today.

The idea behind the stock market is to have a way for businesses to raise money for expansion (other than getting a loan from the bank) and investors buying into the future profit of this expansion. This is capitalism and it's great. It has turned into this casino pumped by easy money with wild up and down swings where any correlation to the soundness of the business, its prospects or performance are purely coincidental.

Market Dynamics.

The "insider" doesn't have to compete with as many people for an ownership share. A small sampling of "insiders" does not efficiently price a security the way an offering to the greater market does.

This idea that capital markets are designed to screw over the little guy is amusing to me to see HERE on THIS WEBSITE of all places.

You act like the market works like Amazon.com where these scary "insiders" list $45 price tags on things. In reality, people are creating BIDS. That's how it works.

I'm not sure what your expectations are of this web site but as far as I can tell we're a bunch of people with different opinions. :-)

To me an IPO is very much a conflict of interest situation with asymmetry of information. There are laws to govern this but there is a huge gray area.

Once a company is public it's a little different...

In my opinion capital markets have been getting more broken in many ways and have been favoring the big guys over the little guys in many ways. I say that as someone who invests in the markets, have benefited from stock options and pretty much seen things from many different angles. In the last 15 years capital markets have failed to deliver the economic growth and the gap between the rich and the poor has widened.

It's not your specific opinion here that amuses me, but that there is certainly an anti-twitter-ipo vibe here. Across several stories. I've been a regular here for 5 years or so and I've seen many IPOs come and go and few have been treated with this level of derision.

You're obviously entitled to your own opinion, and certainly IPOs carry much risk. That "insiders" get made liquid is not, IMO, one of them. Somebody who invested in GOOG on day one would've made over 10x on their money today. Somebody who did the same in ZNGA would not. It's obviously very risky, with potential for commensurate reward.

I'm not sure why you think the markets have "failed to deliver the economic growth" over the last 15 years, or that it's somehow their job to "deliver" economic growth. I think us "little guys" who have invested in the market in that time have done very well on balance.

I'm not one for long back and forths, so feel free to have the last word if you'd like it. I replied initially because I'm very much turned-off by the save-people-from-themselves philosophy.

You quoted Buffet, I'll quote Jesse Livermore: "t was never my thinking that made the big money for me, it always was sitting."

If you think the "little guy" is screwed over by the "big guy", become a buy-and-hold investor. There's little way to be screwed there. Spread your bets out--diversify--and buy and hold. When it comes to trying to time the market or play ER or day trade, you're right, it's hard for a retail investor to make a buck. So buy and hold and let the stock market help you accumulate wealth the way it's done reliably for over a hundred years.

If it is not the job of the capital markets to facilitate economic growth then what are they there for?

facilitate != drive/deliver

Or $18 the day before.

One answer is there are a lot of people who just want to get their billion out. Or million. Or hundred thousand. They are largely undiversified. They are selling to diversified owners who are less impacted by day to day price shocks.