Dot Con

Recently I watched a documentary on the Wall Street dot com inside trading scandal called “Dot Con.” My initial reaction was that these companies who are making millions of dollars on their initial public offering are super lucky. When a “.com” company went public its initial investors were made millionaires overnight. It is just disgusting to me how the investment bankers, in charge of taking the company public, were using the IPO of the company as a form of legalized bribery. There were some cases where a company’s stock price had already increased by literally hundreds of dollars and the broker would offer the stock at the initial offering price to those who he could collect favors from later. This never would have happened if investors were smarter about the companies they invested in.  Many novice investors were getting nailed at the tail end of these “pop stocks” and stuck with the outrageous priced stocks in a company who may not have any sort of plan to become profitable in the future. If someone wants to invest in a company, I hope they use this tragic situation as an example; it is necessary to do research on a company before one invests in it.  It is usually better to invest in a solid company you can trust to make good business decisions and give you small profits, than it is to blindly trust someone because of the enormous amounts of money they say they will generate for you.