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Comment by frostyj | Hacker News Reader

Market will teach these companies a lesson

Yea, I'm sure all the people who built up a multi-billion dollar valuation with a chat application are really going to be hurting when it... wait, since all these companies have already cashed out will it just like shame them or something? Maybe the invisible hand of the market will wag its finger in a condescending manner.

A bunch of these valuations seem pretty BS, but it's not going to hit companies, it'll hit investors that think they're going to make 1000% RoI on the next WhatsApp clone... granted the market is still rewarding them so until it comes down I don't know if we can really consider it to be too foolish.

Right after their sleezeball CEO and all their VCs cash out, leaving small time investors holding the garbage at the end.

I’ve never understood this point of view. Shouldn’t every investor, regardless of scale, bear responsibility for their investments? If by small investors you mean regular employee 401Ks, controlled by the wealth management division of a bank, with a heavily diversified portfolio, that is still a risk the “investor” may be fine accepting. I don’t really feel bad for anyone losing money when they actively put it into a system of massive speculation.

The thing is that most people don’t know what they are doing.

The 401(k) is the only retirement program we have. At the end of the day when companies go public and then go bust the money is often coming from the collective public in some way.

You are right, it’s a very small detail. But it’s one of those cogs that turn while making the rich richer by extracting value from the public.

The founder of this company is a billionaire. A man that runs a company which makes no money is a billionaire. Where did the money ultimately come from? Who pays the bill? He’s added no value to society by any objective measure, he’s just taken.

In most 401(k) plans the default funds don't invest in IPOs. Most workers and retail investors have no exposure here.

During the last crash, most 401k investors didn't think they had much exposure to mortgage-backed securities. Turned out they had lots of exposure to companies that held those securities. I don't know how much that's also true with these IPO stocks.

Most don’t. Not directly. But you don’t need most, just enough.

These companies will teach the Market a lesson, more like.

Companies don't possess a capacity to learn, being just a legal fiction and not actual people.

It's also a fiction that these companies learn and is just as real as the legal fiction.

institutions are just as capable of learning than anything else as long as they consist of bodies that are capable of reform and memory (my home country Germany can tell a lesson about it), and anyhow the idea of an 'actual person' as somehow continuous entity is a fiction too.

Individuals pass through just as many disruptive phases as any other entity. A person at the age of 5 and at the age of 50 is only 'the same' in a legal sense.

Iso9001 being a prominent example of RL on an organizational level.

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