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Stripe cuts internal valuation by 28%

wsj.com

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Re: Stripe cuts internal valuation by 28%

#131

Post by JohnJamesRambo »

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

Maybe it’s time they did.

Re: Stripe cuts internal valuation by 28%

#132

Post by wombatpm »

majormajor wrote: post #62
toomuchtodo wrote: post #42

Earlier quoted context omitted.

I suppose we will need to see what happens when someone like Walmart or Amazon decides to prioritize instant payments over CCs in their checkout flows. The cost savings to them from avoiding merchant fees at their volume makes it inevitable they’ll test it. I can’t say if they’d start to pass along CC merchant fees, but I’m interested to find out. They can even offer BNPL or credit directly to their customers without…

Gas stations do this widely in my area, I wonder what their take rate on debit vs credit is. I've never seen data on that, unfortunately. Amazon/Target/Walmart etc are in an interesting situation re: who would blink first on implementing surcharges. They haven't yet in 5 years, but of course that doesn't mean they never will. Walmart is the one that would seem most likely in terms of targeting value-first customers,…

Local gas station said their CC payments were 2.5% while debit card payments were $0.25 per transaction. At one point they had a sign up encouraging debit card use

Re: Stripe cuts internal valuation by 28%

#133

Post by ruffrey »

ldjkfkdsjnv wrote: post #127

Actually 28% is nothing. Most Fintech stocks are down ~75%, this company is still wildly overvalued

Stripe did $12B in revenue last year. If the valuation of $95B dropped 28%, that is $68B. That seems like a fair, if not quite low valuation of a fast growing SaaS fintech company with an excellent product.

Re: Stripe cuts internal valuation by 28%

#134

Post by ProAm »

rco8786 wrote: post #104
ProAm wrote: post #60

Earlier quoted context omitted.

TBF all those people who took those promises also knew they might never come to realization. In which case, small exodus and you replace them with people FTE's within a reasonable salary range. Happens all the time.

Yea absolutely. But they’re gonna leave for places that are actually paying stock. Stripe has to do something just for retention purposes.

I dont think so. Were entering a recession. There are more programmers looking for work, good programmers or employees, that will accept the current terms.

Re: Stripe cuts internal valuation by 28%

#135

Post by kasey_junk »

rco8786 wrote: post #29
ProAm wrote: post #25

Earlier quoted context omitted.

Why would they need to IPO? Is liquidity stopping them from building anything right now or growing? Why give up any amount of power for a strong private company? Stripe could stay private forever (or 20 years which is the avg lifespan I think of private companies)

They’ve hired 1000s of people with promises of an IPO and currently worthless RSUs. They would need to address that with a change in pay structure and likely some large bonuses up front. But otherwise agree with your reasoning.

Independent of the liquidity issues current rsu holders will have an expiry date. Stripe not going public by those expiry dates will have impact on their ability to recruit and keep staff.

Re: Stripe cuts internal valuation by 28%

#136

Post by JohnJamesRambo »

magneticnorth wrote: post #120
askafriend wrote: post #78

Earlier quoted context omitted.

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.

Stripe has "double trigger" RSUs, meaning you don't actually own them until after IPO + lockup period. There are tax advantages to doing it this way, but it means that a senior hire "getting" $200k/year can't sell on the secondary markets, and may be getting shares that they will never be able to sell for their supposed value.

Sounds like SchruteBucks a company hands out.

Re: Stripe cuts internal valuation by 28%

#138

Post by askafriend »

Spinosaurus wrote: post #100
askafriend wrote: post #78

Earlier quoted context omitted.

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.

Many companies actually prohibit employees from selling shares to third party investors (including investors on marketplaces like EquityZen) without board approval.

This is a really fair and important point - I appreciate you bringing it up.

I've seen a couple of Stripe secondaries before so I assume that some set of employees are able to transact on the secondary market.

However, important disclaimer that not all companies have the same terms - and the terms can change depending on when you were hired. Startup equity isn't absurdly complicated, but it very much is situation-specific which is where the confusion usually comes from.

Re: Stripe cuts internal valuation by 28%

#139

Post by nowherebeen »

ushakov wrote: post #58
rmk wrote: post #54

Earlier quoted context omitted.

Not exactly, but has huge valuation risk and is likely to end up being $50k all said and done. The trouble with equity is that it can fluctuate wildly in value and you only have yourself to blame (because the decision to sell is ultimately yours, and there can be a lot of anxiety and regret attached to it).

most of the startups that offered me stock options had completely exaggerated valuations, so... my heart goes to engineers, who joined a startup on bold promises to make it, but never got to IPO, M&A or even worse - were forced to execute options to later sell them at loss

So many startups never IPO, and their stock options are effectively $0. When they leave they have a small window to exercise them and pay capital gains tax (with inflate valuation, this could be $100k or more).

Anyone thinking of making money off stock options at pre-IPO startup are taking a get a) valuations are realistic b) startup will IPO. In this current environment, both are false.

Re: Stripe cuts internal valuation by 28%

#140

Post by astrange »

nonethewiser wrote: post #129
HFguy wrote: post #121

Earlier quoted context omitted.

We aren't in a recession. The broad job market is still way too tight. But it is coming. It is being engineered by the Fed to reduce inflation. Probably sometime next year.

Recession is measured by GDP. Unless we're not using the technical definition. In which case a recession doesn't have a firm meaning.

Recessions in the US are declared by an NBER panel (retrospectively) based on vibes.

https://www.nber.org/research/business-cycle-dating

https://www.bloomberg.com/news/articles/2022-07-12/no-us-rec...

We currently aren't seeing one; that would be stagflation. We're seeing inflation plus economic activity instead.

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