this post was submitted on 24 Feb 2024
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Public means it's open to anyone, right? Not just institutional investors?
Correct, this means anyone will be able to buy/sell shares on the open market.
It's also why the financials are actually open to the public. They have to publicly disclose all financials/risk factors/etc before they invite the public to buy shares The idea is that institutional/wealthy investors are savvy enough to figure that out on their own.
Thanks for the response. But on this:
Do what on their own? I don't quite follow what you are alluding to here.
Assessment of the company, its current finances, its past finances, and hopefully that will give them a decent forecast of the company's future viability.
In reality it's all just gambling.
Public fundraising laws exist to protect the average Joe from losing his life savings to fly-by-night hucksters while trying to ensure companies can still raise capital.
If you're a wealthy/sophisticated investor, the expectation is that you're already capable of assessing investment risk on your own (including, if you think necessary, getting your own lawyers, direct access to a company's financial reports, due diligence, etc). Average Joe, on the other hand, is required to be given audited financials, a prospectus that's vetted by regulators, explicit statements of share rights, etc etc.