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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 232.37-0.9%Dec 3 3:59 PM EST
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To: Oeconomicus who wrote (144899)8/6/2002 6:47:05 PM
From: Glenn D. Rudolph  Read Replies (3) of 164684
 
"What result? If AMZN is still several points (more than ten, I think) ahead of its IPO price, wouldn't public investors, on average, have to also be ahead?"

Not at all. There are lot more shares out there than there were at the IPO. The people that bought these shares are likely under water by a lot. In fact, much more than those that still hold the original IPO shares.

Thank about it. The company has lost $3 billion. Insiders have taken out billions in profits. Where did this money come from? It surely was not from operating earnings. It is a transfer of wealth from a lot of investors that lost money to the insiders. Here is an example. Bill Miller of Legg Mason has bought millions of shares for his mutual fund investors. His average cost is around $30.00 per share not. I am not sure how many shares he owns but I believe it is around 50 million. I would say that his mutual fund shareholders are way under water. Bascially, his investors had the money and now the insiders have the money. It is a simple transfer of wealth from many to a few. The company continues to lose money at the rate of a $1 million per day. The insiders should become very wealthy from that?
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