[yummyfajitas]

If there was no secondary market, the company would receive far less money at the IPO.

Liquidity is very valuable. Compare the more and less liquid shares in Chipotle - the only difference between CMG and CMG.B is that CMG.B has more voting rights, but less liquidity.

http://www.google.com/finance?chdnp=1&chdd=1&chds=1&...

[arethuza]

Sorry - I was really thinking about the definition of "gambling" and "investing" above. So perhaps using that terminology the original investors at an IPO are willing to do so expecting liquidity based on the willingness of others to gamble on the stock.

Or something like that :-).