Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Stripe cuts internal valuation by 28%

wsj.com

Post reply on HN
Print view View original

81–90 of 235 posts

Re: Stripe cuts internal valuation by 28%

#81

Post by anonymouse008 »

Brystephor wrote: post #70
beebmam wrote: post #59

Earlier quoted context omitted.

Frankly, I'd be fucking pissed off about this if I had options.

I'm genuinely curious why you say this. Could you please elaborate? I've only worked at publicly traded companies. I don't understand how this wouldn't be the exact situation you'd want to be in. my understanding is this: 1. If you're granted options at price X, and the new share price is lower than X, you're under no obligation to exercise your options. So no real financial loss or cost to you. 2. If you're granted…

Think preferences - there’s no way a vc is getting diluted on the back end

Re: Stripe cuts internal valuation by 28%

#82

Post by junofan »

Brystephor wrote: post #70
beebmam wrote: post #59

Earlier quoted context omitted.

Frankly, I'd be fucking pissed off about this if I had options.

I'm genuinely curious why you say this. Could you please elaborate? I've only worked at publicly traded companies. I don't understand how this wouldn't be the exact situation you'd want to be in. my understanding is this: 1. If you're granted options at price X, and the new share price is lower than X, you're under no obligation to exercise your options. So no real financial loss or cost to you. 2. If you're granted…

One, why would you ever want more of a growth company that is shrinking 13 years in with no exit in sight. Two, you miss out on 3 years of upside relative to a 4-year grant. It’s a terrible deal, but I see why they’d want to give it.

Re: Stripe cuts internal valuation by 28%

#83

Post by tdy_err »

lostlogin wrote: post #57
0xEFF wrote: post #52

Earlier quoted context omitted.

Maybe, maybe not. If so, maybe for a profit, maybe for a loss.

How would you sell it for a loss?

Might not be the case here but, generally speaking, it's unfortunately not uncommon for stock option agreements to _require_ the recipient to exercise them at a certain time- in particular, when they leave the company who is granting them.

Re: Stripe cuts internal valuation by 28%

#84

Post by dudus »

fmakunbound wrote: post #71

What’s the difference between internal and external valuation?

Stripe is pre-IPO so any valuation is internal given there's no public market to set a value for it.

It would matter in case they try to raise capital again in the future. By lowering the valuation they make the company cheaper to invest.

Re: Stripe cuts internal valuation by 28%

#85

Post by Brystephor »

junofan wrote: post #82
Brystephor wrote: post #70

Earlier quoted context omitted.

I'm genuinely curious why you say this. Could you please elaborate? I've only worked at publicly traded companies. I don't understand how this wouldn't be the exact situation you'd want to be in. my understanding is this: 1. If you're granted options at price X, and the new share price is lower than X, you're under no obligation to exercise your options. So no real financial loss or cost to you. 2. If you're granted…

One, why would you ever want more of a growth company that is shrinking 13 years in with no exit in sight. Two, you miss out on 3 years of upside relative to a 4-year grant. It’s a terrible deal, but I see why they’d want to give it.

> One, why would you ever want more of a growth company that is shrinking 13 years in with no exit in sight.

Because if your given a fixed dollar amount of shares, and the overall evaluation goes down, you get a higher percentage of ownership.

Why would you want this? In the event that there is an exit, I presume the payout is better.

Public companies are also declining currently if you're using valuation to determine growth. And some of these are 20+ year old companies.

> Two, you miss out on 3 years of upside relative to a 4-year grant. It’s a terrible deal, but I see why they’d want to give it.

This only true assuming things keep going up. Which as we can see, is not true. It's not a "terrible deal". It's a more risk averse deal. If you started a new job at a company in the last 6-12 months and were granted 4 years of stock at a higher price, then stripes offering probably looks pretty good right now.

Re: Stripe cuts internal valuation by 28%

#86

Post by Brystephor »

anonymouse008 wrote: post #81
Brystephor wrote: post #70

Earlier quoted context omitted.

I'm genuinely curious why you say this. Could you please elaborate? I've only worked at publicly traded companies. I don't understand how this wouldn't be the exact situation you'd want to be in. my understanding is this: 1. If you're granted options at price X, and the new share price is lower than X, you're under no obligation to exercise your options. So no real financial loss or cost to you. 2. If you're granted…

Think preferences - there’s no way a vc is getting diluted on the back end

I'm not familiar with this. Are you referring to common vs preferred shares?

Re: Stripe cuts internal valuation by 28%

#87

Post by Brystephor »

toomuchtodo wrote: post #79
Brystephor wrote: post #76

Earlier quoted context omitted.

I work in payments. Can you help me understand how fednow is a threat to credit card transactions? Who even benefits from credit card transactions outside of the credit card user and the network? So what is actually being threatened?

I work adjacent to payments in fintech. I’ve had conversations with largish merchants who have mentioned their intent to attempt to move payment flow to these new rails when available to reduce CC processing costs. Will they? I cannot say for sure, I speak the lens I see through. A real recent quote from a CFO: “why am I handing over 2% of my revenue just to take a payment if I can avoid it?”

I just did a very quick read-through of fednow. It'd be awesome for businesses if they could get their customers to pay via fednow over CC. Just the data requirements alone are less costly (e.g. no PCI DSS requirements for bank accounts).

The problem I think of is getting the customers to use this. If you can entice your customers to consistently use this rail, that's awesome. No idea how you'd do it other than increasing costs to pay via CC. It seems like it also targets digital payments and isn't too focused on in person transactions (e.g. grocery stores).

Re: Stripe cuts internal valuation by 28%

#88

Post by noway421 »

toomuchtodo wrote: post #79
Brystephor wrote: post #76

Earlier quoted context omitted.

I work in payments. Can you help me understand how fednow is a threat to credit card transactions? Who even benefits from credit card transactions outside of the credit card user and the network? So what is actually being threatened?

I work adjacent to payments in fintech. I’ve had conversations with largish merchants who have mentioned their intent to attempt to move payment flow to these new rails when available to reduce CC processing costs. Will they? I cannot say for sure, I speak the lens I see through. A real recent quote from a CFO: “why am I handing over 2% of my revenue just to take a payment if I can avoid it?”

FedNow will allow instant bank transfers. That means that you can build a payment system on top of it similar to Windcave Account2Account (that we have here in Australia and New Zealand)

Windcave Account2Account is not a full replacement for debit/credit cards. It does not have PayWave (solvable). It has a clunky UX (solvable). It does not do credit transactions (not solvable).

It can be a minor headwind to VISA/Mastercard and slightly reduce their new signups and tx volume, but I cannot see it fully replacing credit/debit cards.

Re: Stripe cuts internal valuation by 28%

#89

Post by bigcat12345678 »

askafriend wrote: post #78
ushakov wrote: post #45

Earlier quoted context omitted.

how is something worth $200k if you can't sell it?

I assure you, you will have no trouble selling Stripe stock at what its worth. There is a big appetite for Stripe shares in the secondary markets even if the company never goes public.

[flagged]

Re: Stripe cuts internal valuation by 28%

#90

Post by austhrow743 »

toomuchtodo wrote: post #5
asd88 wrote: post #4

$74B is still quite high for the current market

The current market so far . Interest rates will rise and CC transactions will migrate over time to less costly rails starting in the next 12-18 months (although Radar, Identity, and other value add products are likely to see continued use and rev growth). Imho, Stripe should've IPO'd at the top ~12+_ months ago. EDIT: @pbriet (HN throttling, can't reply directly to your comment) In the US, Zelle does $490B worth of v…

In Australia we've had free real time bank payments for four years now. I am still yet to make a bank transfer as a payment for a regular consumer purchase and have never seen it so much as offered as an option.

Would you know enough about the different systems to talk about why ours hasn't touched b2c but you expect the US one to upend the cc industry?

Post reply on HN