Former hedge fund trader and crypto expert Ian King now writes articles for Banyan Hill Publishing to help their readers understand the cryptocurrency markets and profit from them. He recently explained the advantage of Initial Coin Offerings to ordinary investors.
When most people think of the stock market, the image of investors making money by buying and selling stocks is what comes to mind. It’s the opportunity to get rich by buying stock while it’s cheap and selling it when it’s expensive. For many, it’s the opportunity to buy shares of stock that pay quarterly dividends to shareholders, so the stock market is a place where widows and orphans can come for support. Read more about Ian King for more info.
It’s the 800-pound crypto gorilla in the room: crypto scams exist. Here’s how to avoid them. #crypto #cryptocurrency #bitcoin #investing #cryptocurrencies #prodeum #WallSt #WallStreet #trading #BanyanHillhttps://t.co/PYOruwgNbF
— Ian King (@IanKingGuru) February 2, 2018
However, the most important function in the national economy the stock market plays is to give companies, especially new startup companies, a way to raise capital by selling off ownership. The companies need more cash to operate their businesses. Investors have the cash, and wish to put it to work by buying shares in a successful company so the money grows into the future. Getting cash-hungry companies together with cash-rich investors is why Wall Street and investment banks were invented. The stock exchange is a byproduct. By giving investors a way to easily buy and sell shares, it encourages investment into new companies that will, hopefully, become as successful as the companies already flourishing. Read this article at ZeroHedge about Ian King
However, investment banks on Wall Street do not perform this service for free. There are many complex rules and regulations that control their roles in the process, but one big way they make money is by finding these initial investors and selling the IPO shares of stock to them. In theory, all investors willing to part with their money should have equal access to the new shares. However, that hasn’t been true for many years, especially for early stage tech companies. Most of the growth of startups happens in the tech sector. But only venture capitalists and wealthy investors get access to the stock of these startups early in the IPO process, while they are still cheap. The investment banks have a good idea of the company’s prospects. They reserve the shares for their best prospects. If your broker gives you a chance to buy a hot new IPO stock, either it’s a dog of a company or you’re one of the brokerage’s best and wealthiest customers. For 99% of investors, if they can buy an IPO, they shouldn’t want to. Read more:https://www.investopedia.com/contributors/82716/