Should companies want to increase their cost of capital? That's a hard sell. Should companies want to trade cheap, permissive capital with more expensive, more meddlesome capital? Should existing investors want to be diluted by new investors who *don't offer clear value*?
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You might think "Well, long-term perspective is worth something.", which is both squishy and assumes that the new investors have a long-term perspective. This is not obviously a correct assumption. Maturity transformation is a technology available to the finance industry.
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If you dangle a tens-of-percent discount on, without loss of generality Google, to investors willing to endure a 5 year lockup, Goldman will have disaggregated that security into the two components "Discounted Google" and "Lockup" and sold them to willing counterparties. In days.
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If you don't dangle a tens-of-percent discount on this, it's just "Can I interest you in a share class which is strictly worse than common?"
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End of conversation
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It's not quite that, but there is a long term tax treatment (12 months) and there used to be even more favorable treatment for 5 year holding.
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I don’t understand, aren’t we just talking about bonds?
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