Yes but they also lose any potential gains in value after the transaction.
Not being able to participate in a private company’s growth is something I find pretty annoying.
For myself but also for society.
Not being able to participate in a private company’s growth is something I find pretty annoying.
For myself but also for society.
Plenty of ways to invest in private companies. You just need wealth and connections.
That’s exactly the problem I’m talking about. Public companies create more equality.
Also, we already let people engage in sports gambling (which is guaranteed to result in a net loss) and cryptocurrency speculation, (which is a zero sum game). I'd rather give people more options to invest in financial instruments that at least in theory have the potential to be positive sum, since we're not going to ban either of the other two any time soon.
the premium paid over the market price takes that into account.
if the new buyers think the old owners have a lower expectation of future earnings than them, then the buy makes sense.
From the other comments about EA's games, it's not like EA is that special of a company. There's always going to be some other company (not necessarily an AAA-games maker) worth putting your capital in and end up doing as well as what the hypothetical EA could do if it were not taken private. (Obviously finding such market-outperformer isn't easy but by the same argument I'm not convinced that EA would be obviously that outperformer either.)
And anyways, shareholders are paid a premium on today’s stock price (which theoretically reflects the current value of future profits, or at least the market’s view on it) in order to compensate for the exact loss you mention.