But it isn't - it's the VCs selling, the round B, C, D, E, etc investors selling, it's employees selling, and it's management also selling. Nearly everyone is selling some at the IPO, and only public shareholders (individually and via myriad funds) who are buying. All those other investors are EXITING, or at least partially exiting, at the IPO. It wasn't always like that.

There are two possible outcomes.

1) You buy in at the IPO and proceed over the next little while to make a nice return on your investment. In which case who cares whether some round of investors who came before you were cashed out by your investment.

2) You buy in at the IPO and proceed to not make much money. In which case who cares whether some round of investors were cashed out by your investment.

The point being, Either the IPO was a good deal at the price you bought it or it wasn't, and whether some round of investors came before you or not and made money or not as you bought in on the IPO is completely irrelevant.

Going even further, Mungofitch seems to be saying that if a company is paying its employees more than HE thinks is appropriate that that is somehow bad, no matter how successful the company is. If I read his posts correctly, he pretty much said that the outperformance of google stock could be used to show that they had paid their employees too much by some definition that he seems to find compelling. My question would be: if this is google paying its employees too much, then why isn't some better managed company eating their lunch? Why isn't some other company hiring people at a reasonable price and then performing in google's space in a competitive way such that they make more than google and therefore grow faster than google and displace google?

If you are offered an outsized return by a company which you think is paying its employees too much, precisely what is your definition of too much? If google is running one of the most successful companies ever measured by profitability, who are you or me or anyone to tell them they are overpaying their employees? By what standard do you judge overpayment if not "they weren't very profitable that's how I knew they were overpaying their employees?"

R: