“Link below to: https://blogs.wsj.com/moneybeat/2018/03/16/spotify-and-dropbox-to-join-a-growing-club-profitless-public-companies/ More than three-quarters of the 108 companies that completed IPOs in 2017 reported per-share losses in the 12 months leading up to their debuts, according to data tracked by Jay Ritter, a finance professor at the University of Florida. The share of loss-makers in the IPO market has been rising. Last year, it reached the highest percentage since the peak of the dot-com boom in 2000. By contrast, data spanning nearly four decades shows 38% of companies are typically unprofitable when they go public. The shift suggests investors are comfortable giving companies more space to grow their businesses, often by sacrificing immediate profitability for higher spending on marketing or research and development, according to Mr. Ritter. That’s particularly true in the tech sector, where 17% were profitable last year, barely higher than 14% in 2000. Intelligent investor - Of all the losses triggered by the meltdown of Bear Stearns Cos. a decade ago this week and the crisis that followed, perhaps the biggest was the public’s loss of trust in markets themselves. In the decade since the Bear Stearns bailout, dozens of readers have emailed, called or written me, all echoing the same belief: Rash and feckless risk-takers got rescued by the government with tax dollars collected from prudent, disciplined savers. While former executives of Wall Street firms that crashed and burned are living lavishly in retirement, the people who bailed them out are stuck earning 0.2% on a savings account. In the wake of the financial crisis, Main Street views Wall Street as a place where good things happen to bad people and bad things to good people. That has shattered what psychologists call “belief in a just world,” the notion that, on average, we get what we deserve. It is one of several positive illusions, or intuitions including overconfidence, unrealistic optimism and the illusion of control, that give us comfort we can thrive in what would otherwise feel like an unbearably risky and capricious world. “Evidence that others receive what they deserve confirms that this shared world is just,” the psychologists Carolyn Hafer and Alicia Rubel have written. That gives people “the confidence they need to sacrifice immediate pleasures for long-term rewards.” If you can’t believe honesty is rewarded and rule-breaking punished, how can you feel comfortable handing your money over to strangers? Experiments have shown that people are much less willing to wait for a reward, and more willing to gamble, when they believe that those who run the system can’t be trusted. And almost nobody thinks justice was served in the wake of the bailouts and”
