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Stripe cuts internal valuation by 28%

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Re: Stripe cuts internal valuation by 28%

#191

Post by frays »

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.

If a Stripe employee has $100,000 worth of RSUs and leaves Stripe now, what happens to their RSUs?

Stripe has double-trigger RSUs which won't vest until after IPO.

Do they get to keep these RSUs until after the IPO + lockup period, even though they're not employed at Stripe anymore? (Is there another name for RSUs owned by someone not employed by a company anymore? e.g. unvested shares?)

Re: Stripe cuts internal valuation by 28%

#192

Post by frays »

If a Stripe employee has $100,000 worth of RSUs and leaves Stripe now, what happens to their RSUs?

Stripe has double-trigger RSUs which won't vest until after IPO.

Do they get to keep these RSUs until after the IPO + lockup period, even though they're not employed at Stripe anymore? (Is there another name for RSUs owned by someone not employed by a company anymore? e.g. unvested shares?)

Re: Stripe cuts internal valuation by 28%

#193

Post by rco8786 »

kasey_junk wrote: post #135
rco8786 wrote: post #29

Earlier quoted context omitted.

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.

RSUs don't have expiry dates once they vest, is Stripe doing something weird there?

Re: Stripe cuts internal valuation by 28%

#194

Post by rco8786 »

ProAm wrote: post #134
rco8786 wrote: post #104

Earlier quoted context omitted.

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.

This is a terrible way to do business and I am certain not how Stripe is thinking about it. Programmers are not commodities, especially ones that have been around your org for a while. It's also very expensive and difficult to hire new ones, even if you're hiring them at a cheaper salary than the last ones.

Stripe 100% wants to retain its employee base, just like any company would.

Re: Stripe cuts internal valuation by 28%

#195

Post by rco8786 »

nly wrote: post #168
rco8786 wrote: post #109

Earlier quoted context omitted.

> Is it really gonna matter if they IPO at 100B or just 60b? Let’s ask all the employees who have been told they have $1mm in stock only to find out they in fact have $600k, etc.

Cry me a river

Losing $400k is a big deal to most people.

Re: Stripe cuts internal valuation by 28%

#196

Post by rco8786 »

mupuff1234 wrote: post #123
rco8786 wrote: post #109

Earlier quoted context omitted.

> Is it really gonna matter if they IPO at 100B or just 60b? Let’s ask all the employees who have been told they have $1mm in stock only to find out they in fact have $600k, etc.

But usually there's a lock-up period anyway. If the public market decides it's worth 60b the IPO price might not matter. But also, as an employee, wouldn't you rather have 600k in a public company than 1m in a promise that may or may not substantiate? And if you do believe that it's a 100b company you can just hold.

> If the public market decides it's worth 60b the IPO price might not matter.

Absolutely, same situation, same unhappy people. This story has played out dozens of times and is well documented.

Re: Stripe cuts internal valuation by 28%

#197

Post by nowherebeen »

blocked_again wrote: post #181
davidkuennen wrote: post #149

It will be very interesting to see what happens when all these antitrust cases against Google, Apple and the likes are over. If the verdict will be that developers can use any payment processor, Stripe is in for a huge market.

What makes you think Google and Apple would just stick with their current rates in that case and let Stripe take over?

Yeah and also lots of new competitors will join making it even more difficult for Stripe to compete. Lots of banks already have their own credit card payment processors. They simply aren’t dealing with small clients at the moment because it’s more hassle than it’s worth. Consumer fintech is due for a huge disruption and there are already a lot of startups waiting on the sideline to compete with Stripe.

Re: Stripe cuts internal valuation by 28%

#198

Post by ethbr0 »

id wrote: post #185
echelon wrote: post #156

Earlier quoted context omitted.

To the benefit of the company and the people that control Stripe, not necessarily the hard working ICs that would enjoy liquidity. The opportunity cost of this restriction on their lives is huge. Had they gone public two years ago, employees would have benefitted from a market of a lifetime, with equity in one of the best tickets in town. A lot of life changing early retirements and "Fat FIRE".

>The opportunity cost of this restriction on their lives is huge. What restriction, exactly?

That they continue working at Stripe, instead of pursuing other life goals.

Or to phrase parent's point differently: by not IPO'ing, Stripe forfeited the premium public markets would have been willing to pay Stripe employees for their stock.

Re: Stripe cuts internal valuation by 28%

#199

Post by peanuty1 »

id wrote: post #185
echelon wrote: post #156

Earlier quoted context omitted.

To the benefit of the company and the people that control Stripe, not necessarily the hard working ICs that would enjoy liquidity. The opportunity cost of this restriction on their lives is huge. Had they gone public two years ago, employees would have benefitted from a market of a lifetime, with equity in one of the best tickets in town. A lot of life changing early retirements and "Fat FIRE".

>The opportunity cost of this restriction on their lives is huge. What restriction, exactly?

The restriction of not being able to liquidate their shares on the public market because of Stripe staying private for an unusually long time (Block (formerly Square), the other double-digit billion-dollar Silicon Valley payments company founded in 2009, went public in 2015). I imagine most Stripe employees that joined in 2019 and earlier expected Stripe to have gone public by now.

Re: Stripe cuts internal valuation by 28%

#200

Post by peanuty1 »

rob74 wrote: post #189
radicaldreamer wrote: post #97

Earlier quoted context omitted.

They should still be angry because this company should’ve gone public and made them liquid a year ago.

I doubt that last year was a good time to go public. At the stock market, the shares would likely have fallen by more than 28%. Plus, you can't sell RSUs right away, and watching them sit there and lose value is a pretty frustrating experience too...

The market caps of other Silicon Valley payments companies like Block (formerly Square) and PayPal peaked in Q1-Q3 2021 before declining in Q4. So if Stripe went public before Q2 2021 (to account for 6 month lockup period), their stock-holding employees should have been able to enjoy the opportunity to profit very nicely on their RSUs.
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