[ceejayoz]

> If the shares tank, the valuation of the company goes down and locked up shares lose value.

"Oh no, my $10B became $5B!"

They'll still be happy.

> If individual investors are buying shares and getting blown up, that’s their problem.

Having the general populace fleeced by bad actors is everyone's problem, eventually.

[ericmay]

The flaw in your thinking here is that you’re assuming these greedy people that you are creating in your head would prefer to lose half the value of the shares instead of doubling them. The entire proposition that you are putting forth has no real basis in reality, and doesn’t even match the expected behaviors of your trope of strawman investors.

> Having the general populace fleeced by bad actors is everyone's problem, eventually.

Sure. Creating false narratives and parroting unsubstantiated misinformation and fear mongering is everyone’s problem too.

[ceejayoz]

> The flaw in your thinking here is that you’re assuming these greedy people that you are creating in your head would prefer to lose half the value of the shares instead of doubling them.

The flaw in your thinking is assuming it's actually worth the IPO price.

If I'm a bullshit artist, $100 is great, $50 is good, and I'm just trying to avoid the $0 scenario.

[ericmay]

> The flaw in your thinking is assuming it's actually worth the IPO price.

Then don't buy it at the IPO price? The bullshit artist will have to lower their price until there are takers in the market.

> If I'm a bullshit artist, $100 is great, $50 is good, and I'm just trying to avoid the $0 scenario.

They're not bullshit artists, they're greedy. If you think you're pulling one over on someone $100 is great but $200 is better - might as well see if you can get $200. Since we're just making up random people and motivations.

[ceejayoz]

> Then don't buy it at the IPO price?

I think you're getting lost here.

If I invested $0.50/share, I know my company is worth realistically $10/share, and I can convince you to buy at $100/share, and it plunges to $50/share before I can offload, I am still a pretty happy camper.

Retail investors are the marks, not the scammer here.

> They're not bullshit artists, they're greedy.

Those aren't mutually exclusive.

Musk is both, for instance.

[ericmay]

I wrote in another post which I think fits nicely here: You are ignoring things like lockup periods, vesting schedules, and other general machinery that specifically exist to prevent day 1 or short-term dumps of shares. It's not in the interest of the company that is IPOing or the bank - how can the investment bank go to investors and market securities and then on Day 1 those securities (because it's a pump and dump remember?) drop by 10% - 20% - 30% or more. That's bad business and investors will leave investment firms that did that.

> Retail investors are the marks, not the scammer here.

Retail investors who aren't sophisticated enough to do analysis and evaluate equities shouldn't buy them less they potentially lose (or make) money. You're inventing a scam and scammers where none exist here. Uninformed retail investors, and who knows how much money they even have, should be buying index funds which is what is advised by investment firms, CFPs, and more.

[ceejayoz]

> You are ignoring things like lockup periods, vesting schedules, and other general machinery that specifically exist to prevent day 1 or short-term dumps of shares.

No, I am not. That’s the “it plunges to $50/share before I can offload” period.