Syracuse Business Daily

Friends please share your views?

Does investment in INITIAL PUBLIC OFFERINGS double the wealth in the economy? For example say A has Rs.10,000 and he buys IPO's of say RELIANCE INDUSTRIES for total Rs. 10,000 i.e 1000 shares @ Rs 10 per share. and lets say the Market value of the shares are the same. Thus, A's wealth is Rs 10,000. Now when RELIANCE INDUSTRIES buys a land from say B for 10,000 then B's wealth will be Rs. 10,000. Thus, total wealth generated will be A's wealth of 10,000 + B's wealth of Rs. 10,000 = Rs 20,000. Thus, INVESTMENT in IPO's of a PUBLIC COMPANY has the same effect as credit expansion, only the difference is that here wealth is multiplied. Is my conclusion and interpretation correct?

Public Comments

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2. NO there is no point to this concept. All a IPO means is a company goes public to obtain capital for business. You do not have to be a public company. United Parcel Service went public in 1999. UPS took its place in the financial record books after raising $5.47 billion in the largest U.S. initial public offering. That's all it means!
3. No When you purchase; you become part owner of the company. No different wealths for you and comapany