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Matt Levine

Snap Earnings and Emissions Fraud

Also whistle-blowers, social media and volatility, unicorn lawsuits and management philosophy.


Why would a company do an initial public offering? There is a traditional, boring, correct answer, which is to establish or deepen a relationship with the capital markets so that it can grow and strengthen its business. An IPO is not an endpoint; you don't take your company public and then jet off to your private island with a bag of money. Generally speaking, the chief executive officer is still the CEO, and still owns lots of stock. The venture-capital investors still own a lot of stock in the company, and in all the other companies they haven't taken public yet. The company still has a business that might require access to the capital markets. Everyone involved is a repeat player in a continuing game, so there's a shared desire to make everyone happy, to balance the desires of the sellers (get lots of money, don't give up much control) with those of the buyers (not overpay, get some shareholder rights).