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Comment by bolder88 | Hacker News Reader

> When $25b of wealth is being created

Woah there. I think this is the fundamental issue. $25b of wealth hasn't been created. It's not free money. It's a scam.

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Could you explain why you think that IPOs are scams that don't actually create wealth? Or is it just this one?

Though I'd rather say that an IPO serves to acknowledge the worth already created by the company before the IPO?

I think bolder88 has a problem with the idea that an IPO creates intrinsic wealth, or somehow increases the overall "wealth" of the entire system (either global or within a given country).

Yup, and now the word "wealth" is just a random series of letters when I read it.

As far as I can work out, the IPO does not "create intrinsic wealth", the value is generated by having a successful startup, and this value is then recognised by the market at the IPO - If there was no success in the company already, there would be no wealth at the IPO. But this could be a semantic difference between "creates" and "recognised".

How has $25B of wealth not been created? The market believes that the price of the stock is a price such that the total company would be valued at $25B. What asset can you own other than the dollar that is not based on market pricing? Is $25B worth of gold today worth $25B of wealth? What if the world woke up tomorrow and thought gold was worthless.

I think you have different requirements on what constitutes "wealth".

If you print some more money is that wealth?

Yes, because it could be exchanged for other goods and services. You could buy gold or land (if you printed enough money). Is that not "wealth" to you?

Just printing money in the absence of a reason is generally regarded as a bad idea. More money in the system casing the same quantity of things to buy just causes prices to go up to compensate. In short, inflation. this is very basic economics.

So the short short answer to "If you print some more money is that wealth?" is "No".

https://www.google.co.uk/search?q=printing+money+inflation http://economics.about.com/cs/money/a/print_money.htm

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