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Earlier quoted context omitted.
No that is exactly what a DPO means. Slack did not issue new shares or raise any money when it went public.
No, it doesn't. Companies can still issue and sell new shares during a DPO. Where did people get this silly idea that companies do not raise capital during a DPO? Slack simply chose not to do so.
Or turning against bullshit business models. The growth for taking egregious commissions on takeout and losing money while doing it is a finite market.
20 years ago we had the dotcom craze it was all bullshit business models. F'ed company and all that. Wall street never really cared about any of the tech, it was always about the money. In most cases anyway. Some of the companies that have IPOed recently can only be destroyed by massive investment. Uber for example, should be sized like Craig's list connecting drivers and riders, not 20,000 employees with billions in…
But they had a hard time raising money because they were too big and were profitable. They ended up being acquired by some big dumb dotcom conglomerate and the spun back out at a 5x return to a big evil company who was smart, invested in the platform and makes a lot of money.
IMO it’s an example of the “bulls run, pigs get slaughtered” idea... these funds have to swing for home runs, then panic when rough times loom.
I don't understand why "food-delivery startup" counts as a "tech company".
Delivery of this kind is a three-agent problem: the company needs to coordinate between the restaurant, the driver, and the customer to make the whole thing work. This includes matching the customer to a driver who is in a good position to deliver on time. Keep in mind that the dispatcher, restaurant, driver, and customer may have no prior relationship. You can do that at a small to medium scale without a lot of tech…
That doesn't make Ford or Honda a tech company. They're automobile companies and Postmate is a delivery company.
Might it have something to do with the fact that so many companies have waited so long to go public that there's basically no realistic upside left for retail investors?
I don't think the target is retail investors, at least not directly.
This is an unprecedented time when it comes to two things:
* The amount of money flowing into index ETFs that don't really discriminate what they buy
* The globally low interest rates leaving huge funds seeking returns anywhere they can find them
All they need to do to get a ton of interest is fit the criteria of some of the broad index ETFs (e.g. be listed within the S&P 500) or be more attractive than the competition.
I also don't think it's the assets/companies that are worth as much, but rather that currency has lost a ton of value - exponentially more than any of the reported inflation measures.
I don't understand why "food-delivery startup" counts as a "tech company".
Amazon sold books. They collected enough personal data and built out their infrastructure enough that it allowed them to branch out into...everything. Facebook was a glorified online forum. Now they are minting a new currency and working on the frontier of VR. Uber was a taxi company. Now they are into computer vision, AI, robots, mapping, etcetera.
That's the model that these companies are trying to follow.
Comparing direct listings to IPOs always seemed odd to me. An IPO is a fundraising event . A DPO does not raise any money for the actual business, but it gives liquidity to existing shareholders. The reason we're seeing them now is that there are companies who don't need an IPO to raise money, but have shareholders who have waited 10 years for liquidity.
While yes indeed some employees have waited many years for a liquidity event and want a payout for their hard work, the other shareholders are LPs with a venture capital target date on their funds. This means that the company will either need to keep raising money to buy out earlier investors that need to hit their fund target dates (Rather than raise it all for themselves), or they'll need to go public at some point…