"Rick" foresees a future where entrepreneurs no longer bother with the stock market for raising money. There is a growing trend for companies to raise money privately before selling equity, as Facebook, Google and Twitter did . If I understand him correctly, he believes that in the future they may cut out the latter stage altogether, with worrying implications for the transparency of company activities.
He quotes a former investment manager as saying that investors "essentially dump companies onto public markets when they have extracted most of the value from them." Rick goes on: "Given that we have an ageing global population that is reliant on stock market performance to pay its pensions, if stock markets are increasingly made up of stuff the rich don’t want any more, will they provide the returns necessary to support an increasing proportion of the world’s people?"
It means that pension funds, so long dependent on investment in publicly-traded stock, will have to change their strategy. It has implications for government, too.
No comments:
Post a Comment