Private markets vs. public markets

[buttermarket]

with private companies, market makers or investment bankers cannot sell the shares to dumb money or short the shares to the general 'public' many investment like pension funds for tax purposes list in the 'public exchanges'
private companies don't have access to the 'secondary market' which is much bigger than the private market.
being listed in the public markets cost real companies money and not worth it. and they don't want to be in the public spotlight or answering investor emails etc. and disclose company operating to the 'public'
many companies like Dell, staples went private.. I guess they see no benefit to being a public company with only 3 shareholders. or one major shareholder controlls the company.

 

[ajacobson]

A private company can monetize by going to the public market to list. Some public companies have opted to go private. As was mentioned Dell is probably the most recent one known. A lot depends on what balance sheet you need to accomplish your objectives. Amazon in its pre IPO stage raised $1million in twenty $50000 pieces. IPOed at $18.

 

[Specterx]

Anyway, just a point: In a private market Tesla wouldn't have gone up to 970.

Private markets ostensibly valued WeWork at $47 billion, and Theranos at multiple billions.

IMO history will show that today's defining financial bubbles are actually in the private markets: VC-funded tech in particular, and private equity in general. The mid-2020s will see some high-profile scandals regarding dodgy PE gain accounting, and public investment funds having rushed into what amount to high-leverage, high-fee stock market plays.

 

[zdreg]

Private markets ostensibly valued WeWork at $47 billion, and Theranos at multiple billions.

IMO history will show that today's defining financial bubbles are actually in the private markets: VC-funded tech in particular, and private equity in general. The mid-2020s will see some high-profile scandals regarding dodgy PE gain accounting, and public investment funds having rushed into what amount to high-leverage, high-fee stock market plays.

Do you mean the mid-2020s or mid 2020 will see scandals?

 

[murray t turtle]

.........TSLA....TLDR usually means, "Too long, Didn't Read." Excess verbosity, hehe

%%
NOT likely any would pay anything close to TSLA price in private market. And speaking of private or privacy issue, thats why some RE owners over pay for privacy , neighbor property LOL-LOL+ true..........................................................................................................IF they fire mr musk,+ Wall Street may think that way. I would hate to see a TSLA 2050, year, not stock price.; the year quite a few states are required to use ''clean energy'' But batteries require energy mostly by dirty hydrocarbons + horses are clean but REAL DIRTY if they start using many on the streets again. , LOL

 

[Sig]

Private markets ostensibly valued WeWork at $47 billion, and Theranos at multiple billions.

IMO history will show that today's defining financial bubbles are actually in the private markets: VC-funded tech in particular, and private equity in general. The mid-2020s will see some high-profile scandals regarding dodgy PE gain accounting, and public investment funds having rushed into what amount to high-leverage, high-fee stock market plays.

Even throwing out the big name unicorns there have been a slew of IPOs at lower valuations then the final private investment round, Casper is just the latest example. It is interesting that this is flipped from the dot com days when the institutional folks were knowingly throwing crap at the public markets and the markets didn't seem to realize it. One common theme seems to be that most of these are capital intensive companies that somehow sold their investors the fairy tale that they were tech companies. We haven't seen a lot of actual tech company down round IPOs.

 

[Specterx]

Do you mean the mid-2020s or mid 2020 will see scandals?

The mid-2020s i.e. 4-6 years from now. Aside from isolated incidents like WeWork (which is still going, after Softbank tossed in yet more cash), I doubt there will be any serious reckoning until a much broader turn in the financial cycle. Based on the past few months, it looks like we're just now entering a manic blowoff phase that will last 2-3 years at the very least, and make the dotcom bubble look puny by comparison (think SPX PEs at 40-50, and NDX at 50-100).