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Stripe cuts internal valuation by 28%

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Re: Stripe cuts internal valuation by 28%

#221

Post by danachow »

rco8786 wrote: post #194
ProAm wrote: post #134

Earlier quoted context omitted.

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.

> Programmers are not commodities

But usually, they are treated as such. American companies have a hard time treating most of their white collar workforce as anything but. On the other hand, Stripe has been seemingly well managed up to this point - but they have only existed in happy times so far. Many companies change their tune when the chips are down.

> 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.

This may be true - but the average tenure of a tech worker shows most firms are not able to do act on this.

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

I wouldn't put it past Stripe, but "just like any company would" is pretty naive. Serious retention efforts are by far the exception in my observation. This also weakens your argument - is Stripe not actively working to retain talent or are they just like "any company?" If really the latter, then they are fucked.

Re: Stripe cuts internal valuation by 28%

#222

Post by paxys »

majormajor wrote: post #30
paxys wrote: post #6

Should be cut by 50%+ to be in line with the rest of the tech market, and even more if you are valuing it as a FinTech company. SQ is down 75% since its November peak.

I think it's extremely important to note here that June 2020-June 2022 is the bigger aberration for SQ/Block's share price than July 2022. It's extremely painful to those who bought in, or got granted shares/options, at the super-inflated prices, but it's closer to a "return to normal" than an epic crash so far. Hopefully that continues and also hopefully people recognize that, so that panic doesn't push things furth…

Why do you think Stripe's rise to a ~$100B valuation during that same period wasn't a similar aberration?

Re: Stripe cuts internal valuation by 28%

#223

Post by paxys »

frays wrote: post #192

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?)

They get to keep the vested RSUs (first trigger) when they leave the company.

Re: Stripe cuts internal valuation by 28%

#224

Post by nowherebeen »

q7xvh97o2pDhNrh wrote: post #220
nowherebeen wrote: post #169

Earlier quoted context omitted.

I would define Stripe as B2B2C. It’s not simply a B2B because they help business charge customers. Their value is convincing business to use their platform. Most businesses will choose payment gateways that their customers use. And by far the number 1 request from customers is usually PayPal. They might be invisible to the customer, but business will alway prefer to integrate with payment gateways that will get custo…

> I would define Stripe as B2B2C. I agree; this is more accurate. > And by far the number 1 request from customers is usually PayPal. Do you have any data on this? I'm genuinely curious. Not only do I have a long list of negative experiences with PayPal that skew my own take, but I also have no idea where to look for this kind of industry-wide data on B2B2C customer-demand.

I don’t. But I used to run a Yoga platform and used Stripe. None of my customers (Yoga instructors) knew about Stripe. They always requested PayPal or Square to the point, I realized using Stripe only made my life easier, but my customers didn’t care. It was a huge hassle to convince them a) to use my platform and b) to use Stripe. So it became 2x more difficult to onboard them. Same thing for their customers. Since I was a new platform, they ask their instructors why it wasn’t PayPal or Square. They trusted those brands to hand over their card.

Re: Stripe cuts internal valuation by 28%

#225

Post by cco »

happyopossum wrote: post #147
cco wrote: post #114

Earlier quoted context omitted.

Could you clarify? By any measure we're already in a recession today. I'm certainly no economist so maybe there is some other detail we're missing?

> By any measure we're already in a recession today. Except we are not by the accepted definition of a recession (2 consecutive quarters of negative growth). You can make the word mean something else, but then it’s kinda useless.

That is the common definition I used, we've had two consecutive quarters of widespread negative growth. Its fair that its just the Fed estimate for Q2 still, but Q1 and Q2 are negative this year.

Re: Stripe cuts internal valuation by 28%

#226

Post by cco »

danielmarkbruce wrote: post #118
cco wrote: post #114

Earlier quoted context omitted.

Could you clarify? By any measure we're already in a recession today. I'm certainly no economist so maybe there is some other detail we're missing?

Which measure are you using?

Two consecutive quarters of negative growth plus...well the S&P is down nearly 25% over the last six months.

If this isn't a recession I don't know what is.

Re: Stripe cuts internal valuation by 28%

#227

Post by rmk »

cco wrote: post #114
beernet wrote: post #96

Scary this is just the beginning... a recession has not even started

Could you clarify? By any measure we're already in a recession today. I'm certainly no economist so maybe there is some other detail we're missing?

There is a separate board of economists at the NBER that meets up and takes a vote after taking into account various economic indicators. If they vote yes, then formally the economy is in a recession. This board is a bit conservative and their recession declarations are usually after the fact (once they have looked at the indicators). So technically we are not in a recession yet.

Re: Stripe cuts internal valuation by 28%

#228

Post by doktorhladnjak »

nostrebored wrote: post #182
projectazorian wrote: post #101

Earlier quoted context omitted.

If the other posts are to be believed they don’t have options, they have RSU’s. Not the same thing. Still not great of course but it’s better in the long run if leadership levels with people.

Stripe employees in the U.S. have RSUs. Not always true abroad.

A previous place I worked had this situation of employees in countries like Australia getting options because of the tax laws there. Company IPO’d at a price below the last 409a. By the time lockup was over, options going back several years were underwater.

Those employees’ equity was worthless while those on RSUs in the US (and many other countries) still got something.

Re: Stripe cuts internal valuation by 28%

#229

Post by doktorhladnjak »

bogomipz wrote: post #142
magneticnorth wrote: post #120

Earlier quoted context omitted.

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.

>"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, ..." Interesting. I've not heard of the term "double trigger RSUs" before. What are the tax advantage of this over regular options? Most companies have right of first refusal of secondary market sales of pre-IPO stock. If the goal was to prevent secondary market sales…

There are some benefits for employees. So long as the company goes public, RSUs are worth something unlike options which can be underwater. You don’t have to pay to exercise them. Tax is only due at IPO and treated as normal income. There are none of the rules around AMT. There’s not the risk as with options of paying out of pocket to exercise plus taxes then the stock drops or there’s no liquidity and you’re net negative.

From the company’s perspective, employees with RSUs are not actually shareholders until IPO. All those SEC and state rules about having to report like a public company once you have a certain number of employees are avoided. It essentially lets companies stay private much longer.

Re: Stripe cuts internal valuation by 28%

#230

Post by bigcloud1299 »

happyopossum wrote: post #147
cco wrote: post #114

Earlier quoted context omitted.

Could you clarify? By any measure we're already in a recession today. I'm certainly no economist so maybe there is some other detail we're missing?

> By any measure we're already in a recession today. Except we are not by the accepted definition of a recession (2 consecutive quarters of negative growth). You can make the word mean something else, but then it’s kinda useless.

This definition has changed to including higher unemployment rate like 5%. So from it we could never enter recession. Tho was introduced in NBER post 2009.
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