In a previous posting, I mentioned in passing:
"Throw in a non-protectable business plan and low barriers to entry and, well, you've got a serious problem. Well, you would have a problem if your goal was to make money. But the way these "new-tech-that-aren't-tech" companies work is not to make profits for shareholder but to make capital gains for founders and early investors. It is nothing short of a legal con game."
When I was at the big odious law firm (for all of six months) I didn't understand this. Being naive, I assumed the point of an IPO was to "raise capital" for a company to buy machines and build factories. After all, my background was in heavy machinery - ball bearing and air conditioning factories which had been in business for nearly a century - and used capital to buy machines and factories and hire people. This "new paradigm" had me stymied, because it never occurred to me it was all a fraud in a manner of speaking.
People buy into this nonsense out of greed. I get e-mails all the time from people who want to make a lot of money in a short period of time, without any risk or effort on their part. In their mind, they are "missing out" on the last big IPO, gold, or Bitcoin. After all, all those people in the newspaper made money at it, why not them? Why couldn't they be the one to cash in on the Microsoft IPO back in the day?
And right there is the answer. Back when Microsoft went public, there wasn't much of a "buzz" about it, or about IPOs in general. In fact, most Americans didn't know what an "IPO" was until the mid-1990's when the dot-com boom (and bust) occurred. This whole deal of hyping IPOs is a recent invention, not some time-honored tradition. And today, it is all the financial press talks about, as it is easy to write stories about, and it is something happening in the market that appears interesting, so readers will click on it. Reporting on traffic is boring. Reporting on a traffic accident, particularly a bloody one, is interesting and is easier to sell to readers and viewers. The financial press is no different.
We estimate that the net proceeds from the sale of our Class A common stock in this offering will be approximately $278.5 million, after deducting the underwriting discount and estimated offering expenses payable by us. If the underwriters fully exercise their option to purchase additional shares from us in this offering, we estimate that the net proceeds will be approximately $321.0 million.The principal purposes of this offering are to create a public market for our Class A common stock, facilitate access to the public equity markets, increase our visibility in the marketplace and obtain additional capital