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Snap falls to IPO price

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Re: Snap falls to IPO price

#121
post #28
post #14

Earlier quoted context omitted.

Did you try to subscribe to the IPO? It was not hard at all. I'm an "average" investory with a standard Charles Schwab trading account and subscribed to it with a few clicks of my mouse. I imagine anyone else could with their brokerage. It was oversubscribed tho, so I got half the quantity I wanted and sold shortly after opening.

> It was oversubscribed tho, so I got half the quantity I wanted and sold shortly after opening. This seems like a pretty good reason to auction the shares in order to maximize the amount of money the company takes in. That they very rarely do has always seemed kind of dirty to me.

> This seems like a pretty good reason to auction the shares in order to maximize the amount of money the company takes in. That they very rarely do has always seemed kind of dirty to me.

There's nothing dirty about it. Public investors prefer to have a single price, because that's, well, how public markets generally operate after an IPO. They don't want to have to participate in an auction. The purpose of underwriting banks is to provide a single price to public investors while also providing a competitive market for the companies.

The auction occurs between the underwriting banks, who compete for the company's business. The company chooses the bank that they want to use for their IPO (price being one of several factors, as is true for any marketplace). There's some risk involved, which is why underwriting banks effectively take a cut - in that sense, they're acting like an insurer, which takes a premium in exchange for absorbing risk for both parties.

Re: Snap falls to IPO price

#122
post #54

Earlier quoted context omitted.

That would stop the issuers from making a bundle on just about every IPO and we can't have that now, can we?

So this is pretty lazy anti-intellectualism. Can you provide some evidence that the investment banks are colluding on IPO pricing?

> So this is pretty lazy anti-intellectualism.

Ironically, your comment is also lazy anti-intellectualism.

(and even more ironically, so is mine!)

Re: Snap falls to IPO price

#123
post #42
post #31

snapchat baffles me. It's just another instant messaging platform except that they came up with the idea of messages that delete themselves after a time period. The problem is that this killer feature is easily subverted by taking a picture of your screen. So basically, they have provided an instant messaging platform with one extra useless feature.

More to the point, this "killer feature" is easily cloned by a competitor and shows that the product creates no competitive barriers. Coupled with the fact that the cloner has a much better idea of their users and can target ads much more successfully, this creates a long road for $SNAP.

Too be fair, a big thing with all these social apps is network effect.

Snap had first mover advantage, which is nothing to scoff at.

Re: Snap falls to IPO price

#124
post #42

Earlier quoted context omitted.

More to the point, this "killer feature" is easily cloned by a competitor and shows that the product creates no competitive barriers. Coupled with the fact that the cloner has a much better idea of their users and can target ads much more successfully, this creates a long road for $SNAP.

> More to the point, this "killer feature" is easily cloned by a competitor This doesn't really agree with > The problem is that this killer feature is easily subverted Let's let one company implement the feature before we decide it will be easy for competitors to implement it too.

WhatsApp, Instagram and FB all have it now. TBH I only see widespread use of it on Instagram, but everyone around me seems to have stopped giving a crap about Snapchat since.

Re: Snap falls to IPO price

#125
post #109
post #107

Earlier quoted context omitted.

They are quite literally setting the prices of IPO's though, by fiat, and not via an auction or some other market-oriented mechanism. I have no opinion about actual 'collusion' but the mechanism looks pretty bad seen from afar.

The banks compete against each other on price - the company gets to freely choose the underwriter and they take price into account. Do you have evidence the banks are colluding on price? Edit: to clarify, no the banks do not really set the IPO price. The banks offer different underwriting prices. The company ultimately chooses the price among the many banks' offers.

> Do you have evidence the banks are colluding on price?

Nope, which is why I wrote that I have no opinion on that. Edit: I think that very direct collusion would probably not be a stable arrangement, long term. But perhaps 'not competing too hard' between a low number of competitors with big barriers to entry is realistic.

> Edit: to clarify, no the banks do not really set the IPO price. The banks offer different underwriting prices. The company ultimately chooses the price among the many banks' offers.

That's still a way less transparent and market-oriented option than auctioning the shares. It's a hell of a lot easier for a few banks to be 'gentlemanly' in their competition than it is for lots of people trying to get some shares at an IPO via an auction.

I mean, we're discussing an IPO that was "oversubscribed" at the set price, meaning money was being left on the table, right?

Re: Snap falls to IPO price

#126
post #46

Earlier quoted context omitted.

I was referring to the trading account, which is independent from the bank. Tho Charles Schwab bank accounts are useful because they refund your ATM fees.

Free checking account helps too; they sent me two boxes of checks and a checkpad with a $0 initial balance, for no fees. And they offer you commission-free trades too if you offer to transfer in enough funds. Great, great, place to keep your finances.

> Great, great, place to keep your finances.

Has their security improved since they made HN a few years ago?

https://news.ycombinator.com/item?id=8783790

Re: Snap falls to IPO price

#127

Earlier quoted context omitted.

There are only a handful of people on the planet that could reasonably claim that $1.4 billion doesn't matter that much to them (and none of them are likely to actually hold that belief). It's an absurd premise to claim that 80%-90% of someone's wealth does not matter much to them. Not to mention implying all sorts of horrible things about their character in the process (to claim what you are, is identical to claimin…

I believe the point is more about the marginal utility of wealth and what additional products and services $1.4 billion can buy relative to the $250+MM net worth they have now.

$250 million means I need to fundraise to build my spaceship. With $1.4 billion, I can get started on a Dyson sphere. Depends on your goals.

Re: Snap falls to IPO price

#129
post #31

snapchat baffles me. It's just another instant messaging platform except that they came up with the idea of messages that delete themselves after a time period. The problem is that this killer feature is easily subverted by taking a picture of your screen. So basically, they have provided an instant messaging platform with one extra useless feature.

The other, probably more important, innovation was that you have to take the picture at the same time as you send it - no loading from the camera roll.

Re: Snap falls to IPO price

#130
post #8

What does $SNAP need to do to deliver on the hype? Is there anything that can make $SNAP a good investment for anyone other than the parties involved in trading the IPO? I tend to be bearish on $SNAP in general, but I'm interested in the discussion. How do they right the ship and boost back up to that $25-30 range? What's their play?

Maybe they should try to copy facebook's social network but remove features a good subset of people don't like and stick to more of a private image?
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