Cashing out before the crash while the markets will still support IPO's
Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
101–110 of 163 posts
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#102Earlier quoted context omitted.
If you had $1MM in cash, how much of it would you use to buy the company's stock?
This exactly. I work at Google and it astonishes me how surprised people are when I tell them I use autosale, the company program where your stocks are sold immediately as they vest. They always ask "Don't you think Google stock is going to go up?" And I always reply that yes I do think it will go up but 1) that's not the right question to ask, you should ask whether it will go up more/less than anything else you cou…
Would you not want to sell stock you have held for some time to take advantage of lower capital gains - or do the US tax authorities assume you are selling older stock first?
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#103Earlier quoted context omitted.
Supervised learning requires labels. Unsupervised doesn't. Self driving cars use elements of both. This is why companies like Cruise and Tesla are rushing to get basic self driving cars out there. They need driving data.
Fair enough. I guess I'm in the camp that unsupervised learning is of limited utility.
Human input in normal cars with sensors provides supervision.
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#104Let’s say the company you work for goes public and your stock is suddenly worth $1,000,000 (as an example). A wise investor, you normally put all of your other savings into broad market index funds. Now, do you sell your company’s stock that was given to you and took you four years to vest into, or do you hold on to it and hope the valuation keeps rising? (This is a rhetorical question btw)
Not sure a wise investor would 100% use "index" funds especially one with such a large > 1M portfolio.
At that level you would need to look at diversification both on a geographical and sector level.
In the UK I would of course sell enough to use up my CGT allowance - you can also move up to 20k£ into an ISA to put the shares beyond tax for CGT and Dividend Tax
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#105Earlier quoted context omitted.
#2 is the dominant point. One of the subtle points on diversification is that it's ok to take less returns if they are uncorrelated to your other investments - you want things that go up when your main investments go down. Even if you're 90% sure that Google will beat the market, you want protection for the 10% case. (And yes - your human capital will take the upside when Google continues to do well)
It's not like you're taking much career risk by working at google, so you don't really need to diversify it away. It's much more important for smaller companies.
I'm sure people an Enron and Lehman Brothers thought the same. Even if it's a one in a billion chance, you should be protected for that.
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#106There are some good and some not so good among these companies. Uber is a taxi company with an app. Cars still cost the same as before to run, drivers still cost the same as before, all costs are the same as before. So once the subsidization by VCs stops, Uber rides will be as expensive as any other ride. Self-driving cars will not save Uber either. There is no network effect with self-driving cars, and once the tech…
Having ridden in thousands of cabs, and hundreds of Ubers, calling Uber a “taxi company with an app” is like calling an airplane a car with a crossbeam.
You must have some pretty poor apps - my local one doesn't even need an app.
In the UK when I call my normal cab company it knows where my phone is and asks you to press 1 to book a cab to my location - I then get a SMS confirming the booking another when the cab is dispatched and one when it arrives
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#107Earlier quoted context omitted.
The real question is why a company like Google is still giving stock to employees. The whole thing is a con at the expense of ignorant shareholders who somehow think all this dilution is not coming out of their pocket.
Stock based compensation is reported as an expense in income statements, so, you're wrong.
This is why I said ignorant shareholders.
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#108Earlier quoted context omitted.
The real question is why a company like Google is still giving stock to employees. The whole thing is a con at the expense of ignorant shareholders who somehow think all this dilution is not coming out of their pocket.
As sibling points out, this is reported in the financials of the company so shareholders are informed. The reasons companies (listed and otherwise) give stock rather than cash are: 1)cashflow - it allows them to compensate people without affecting the cash position of the business 2)tax - sometimes it's more tax-efficient for the company than cash compensation 3)incentivises retention - vesting keeps people on the tr…
Yes I know this is not just a SV thing, but it is still a con. About the only rational reason for granting stock in a company the size of Google is for tax reasons, but there is not even a good case here. If you want to tie compensation to long term performance then do this, don't just grant stock that can be sold straight away.
The reason it is used by lots of companies is it is a very effective way of stealing the shareholders money without them squawking.
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#109Earlier quoted context omitted.
#2 is the dominant point. One of the subtle points on diversification is that it's ok to take less returns if they are uncorrelated to your other investments - you want things that go up when your main investments go down. Even if you're 90% sure that Google will beat the market, you want protection for the 10% case. (And yes - your human capital will take the upside when Google continues to do well)
It's not like you're taking much career risk by working at google, so you don't really need to diversify it away. It's much more important for smaller companies.
The problem isn't how risky your career at Google is, it's about the correlation of that risk with the risk of your investments. The most likely risk of working at Google is if you lose your job. Well losing your job is highly correlated with whether Google lays loads of people off. Which is highly correlated with the share price collapsing. Which is highly correlated with the tech sector crashing.
So most likely scenario for that risk to materialize involves: Google runs into trouble so needs to lay people off. So at that point, you've lost your job, and all your investments in Google are down for the same reason you lost your job, and because Google is such a large company it's layoffs mean a flood of talent into the labor pool so your future job prospects are effected.
So your safety net of savings becomes far less valuable at exactly the time you use it most.
It almost doesn't matter how safe you think Google is - because by working there you're already massively more invested in it than almost any investor would be.
Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave
#110Earlier quoted context omitted.
This exactly. I work at Google and it astonishes me how surprised people are when I tell them I use autosale, the company program where your stocks are sold immediately as they vest. They always ask "Don't you think Google stock is going to go up?" And I always reply that yes I do think it will go up but 1) that's not the right question to ask, you should ask whether it will go up more/less than anything else you cou…
The real question is why a company like Google is still giving stock to employees. The whole thing is a con at the expense of ignorant shareholders who somehow think all this dilution is not coming out of their pocket.
No its part of the employees comp - you seem to have a very 19th century Dickensian view of employees.