121–130 of 470 posts
Earlier quoted context omitted.
This reads almost like a sports statistic with how arbitrary it feels.
It’s not arbitrary at all. IPOs are structured by investments banks to ‘pop’ on the first day. If the closing price is below the IPO that is generally regarded as a failure and may imply over-valuation.
Unprofitable companies are the only ones that really benefit from IPOs. An IPO is basically a way for the company to raise money, but tis time straight from the public. Usually when it gets harder and harder for them to attract private investors. The IPO listing basically guarantees that they won't take the public's billions and run. Successful companies with perfect cash flows (think of Github, Valve, IKEA) always t…
You are making a mistaken assumption that only unprofitable companies need to fundraise, there are lots of profitable companies that want to raise capital to fund future growth (and their current cash flows aren’t enough).
Also I am very surprised that you named Github as a well run private company. As far I know, they were definitely not profitable (their spend was crazy) which is part of the reason the board took the acquisition offer from Microsoft. I really don’t think they are a good example of a well run private company.
You are correct that only companies that want capital IPO but that is by definition as an IPO is a capital raise. I believe that direct listing is an exception to this.
Unprofitable companies are the only ones that really benefit from IPOs. An IPO is basically a way for the company to raise money, but tis time straight from the public. Usually when it gets harder and harder for them to attract private investors. The IPO listing basically guarantees that they won't take the public's billions and run. Successful companies with perfect cash flows (think of Github, Valve, IKEA) always t…
Earlier quoted context omitted.
Do IPOs usually generate new funding for the IPO company? IPOs seem serve as an `exit` for private investors who bought in while the company was private?
They do both. It's relatively rare for a company to IPO without raising fresh capital for the company. There are however often "secondary" share sales where only "selling shareholders" (rather than the company) receive the proceeds.
Morgan Stanley going to have to do a lot to stabilize the price over the coming days... On Uber's side, they sold at their $45 mark. However, seems this may have been a down round vs their last private funding round ($74.1BN pre-money vs $76BN last year).
According to this article, stock was valued internally at $49/share in 2016 , so anyone joining in the last three years will not have enjoyed any sort of rocket-ship growth. https://news.yahoo.com/uber-employees-may-not-partying-15171...
We don't know if they did a split before going public or not.
https://www.bloomberg.com/opinion/articles/2019-05-10/the-un...
Earlier quoted context omitted.
Do IPOs usually generate new funding for the IPO company? IPOs seem serve as an `exit` for private investors who bought in while the company was private?
They do both. It's relatively rare for a company to IPO without raising fresh capital for the company. There are however often "secondary" share sales where only "selling shareholders" (rather than the company) receive the proceeds.
An IPO without raising new capital would make it more difficult to answer what every buyer should ask: "why are they so eager to sell?" It's a variation of plausible deniability.
Unprofitable companies are the only ones that really benefit from IPOs. An IPO is basically a way for the company to raise money, but tis time straight from the public. Usually when it gets harder and harder for them to attract private investors. The IPO listing basically guarantees that they won't take the public's billions and run. Successful companies with perfect cash flows (think of Github, Valve, IKEA) always t…
I hear you, but...
Meh, they say invest in companies who make products you use. I use the shit out of Uber and I don't plan on stopping even if the price goes up a bit. Now, I'm upper middle class, and I understand this isn't everyone's mindset, so I have no idea how the rest of the world feels.
However, there are locatios, like my crappy hometown where I grew up not so fortunate circumstances, where hailing a cab simply wasn't an option. If you want to have fun at a bar, you're driving home drunk.
Bottom line, I believe in this product and I only see it growing in importance - regardless of who is at the helm. That's my gut feel, and that's why I bought in a little today.
Unprofitable companies are the only ones that really benefit from IPOs. An IPO is basically a way for the company to raise money, but tis time straight from the public. Usually when it gets harder and harder for them to attract private investors. The IPO listing basically guarantees that they won't take the public's billions and run. Successful companies with perfect cash flows (think of Github, Valve, IKEA) always t…
This doesn’t follow at all. Zuck still has control and they were careless before being public. I would suggest being public is the only thing that puts them in the spotlight for their shitty practices.
Earlier quoted context omitted.
Amazon didn't turned profit for first 5 years or so after IPO. If you go back 15 years down the history, you will find many articles/analysis doubting if they would ever become profitable. However no one doubted that online retail was the future and brick-and-mortar stores will increasingly become part of the history. I see a lot of parallels here. No one doubts anymore that app-based cabs are the future and traditio…
This is a foolish viewpoint. Amazon got immense economies of scale as they grew, Uber’s costs scale alongside it. It drives me crazy that so many people equivocate them.