How can a company who has not produced a single good or service be publicly traded? (Looking at you Lordstown)
In: Economics
They can be publicly traded the same way any other company can be. They offer a portion of the company for sale via an IPO. They produce documents showing their current financials, projected financials, risks associated with investing in them, etc. And some investors are willing to take on those risk and buy stock.
Some investors want to see a track record of products that sell profitably, others see a good idea and take a risk hoping they’ll be in on the ground floor of something that could be huge.
While its unconventional to go public before selling a product, building cars is a capital intensive business so having access to that additional source of capital can help ensure they are able to bring their vehicles to market and scale in a way that’ll be profitable sooner than later.
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