Just a little note here concerning the upcoming IPO of Lyft, the ride sharing company. CNBC is trying to tell us that certain people are going to get rich as a result of this IPO. This is not so – the people they’re talking about are already rich. They must be, otherwise how would an IPO gain them value?
Quite, they’e in the process of selling some part of something that’s valuable, that’s what an IPO is. Great, good luck to them. But to be able to sell it then they must own it now. And further, to be able to sell it for some nice large amount then it must already be valuable. Thus, they already own some decent piece of something that is already valuable – they’re already rich.[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Here’s who stands to get rich from Lyft’s IPO
Lyft is poised to rake in as much as $2 billion when it debuts on the public markets later this month.
Lyft’s major shareholders will collectively hold billions in value when the company debuts.[/perfectpullquote]
The shareholders already own stakes worth billions. That’s why the company is being valued at billions in the IPO. That is, no one gets rich from an IPO. Because in order to have one the people doing the selling must already own something valuable.