The market gets what it wants. Facebook traded down after its initial public offering because of concerns that it lacked a mobile strategy—then it quickly got one. Uber laid off 400 employees to try to stem its post-IPO slide, but the stock has kept declining, so expect even more layoffs. And it doesn’t take a crystal ball to see the day within a year of WeWork’s IPO that their stock sells off and they finally change their squishy cash-soaking business model. This is what public markets are good at: creating urgency.
Sure, this makes the stock market sound like a stubborn bratty child throwing a hissy fit. And that’s basically right. But remember, the market is the sum of billions of transactions—it is investors’ collective intelligence encouraging progress and showing disappointment at anything that threatens the right allocation of capital to increase value for society. It isn’t always right, but it definitely broadcasts meaningful sentiments. And the market is sharper than any poll or committee, let alone one person making decisions.