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To: JoJoK who wrote (117873)	2/6/2014 12:45:53 PM
From: Steve Felix	Read Replies (1) \| Respond to of 118717

"Our capital goes to a company in exchange for equity stake in the company." None of my money has ever "gone to the company", just the person on the other side of the trade. You do know what an IPO is?

To: JoJoK who wrote (117873)	2/6/2014 1:27:13 PM
From: bruwin	Read Replies (1) \| Respond to of 118717

"That's basically what investing is. We're capital allocators. Our capital goes to a company in exchange for equity stake in the company." Well, ... I'd say that the only time that a company obtains external capital for use in its business is when it issues shares, from its "share pool", to the public. So when you look at its Financial Statements you will see an item for "Total Common Shares Outstanding". That number stays constant unless the company issues more shares or buys back its own shares. So once those shares are out in the business domain they are traded between buyers and sellers and the company no longer benefits in terms of any more injection of capital from those previously issued shares. So owners of those shares are certainly shareholders in that company, but that's about it. There's no more capital going to a company in exchange for equity, unless more shares are issued. Needless to say, the other ways for a company to obtain Capital is from a bank loan or from borrowing via issuing bonds of various kinds.