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I don't think Amazon's stock going to $0 would necessarily entail wealth destruction. The money doesn't just disappear, people who have sold at the high have profited. Wealth destruction only happens when credit is involved.



If you're confused by the downvotes, it's because the stock market is not a zero-sum game. This is a common misconception about equities. The stock market can both create and destroy wealth because it is not a zero-sum game.


I'm not an expert and I would love for someone to tell me I'm wrong. Having said that I think what I wrote in the previous post is wrong, Amazon going to $0 would clearly entail some wealth destruction, namely at least the amount that was raised in the IPO and any further issuing of stock (options not included since they only dilute). But besides that any temporary increase in the stock's value, is not equivalent to each stockholder getting an equivalent amount of cash (which was what the OP claimed and what I assumed he meant with wealth creation/destruction) just as a decrease in the stock price is not the same as an overall decrease in money in the population. Some people sell at a high or at any price above the price of the IPO/ price at which money was raised, which captures some of the temporary increase, any loss that includes the money that was actually raised by Amazon would be actual wealth destruction (cash losses), but I don't see how the rest of those losses would also correspond to actual cash losses.




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