For High Tech Companies, Going Public Sucks • Hacker News Board

Re: For High Tech Companies, Going Public Sucks

#21

Post by [deleted] » Sun, Mar 25, 2012, 10:30 PM UTC

drostie wrote: post #15

Agathos wrote: post #11

The increasing emphasis on the short term prospects of a publicly traded company is a problem. But is there anything here that's specific to software and web-focused companies? Others have been writing about this for years. John Bogle for example has argued that the increasing concentration of shares in a handful of pensions and mutual funds prevents the company's owners from acting like long-term owners.

There is something slightly more specific, which is that we have some technology-related gris-gris [1]. The basic problem is that everyone feels more or less qualified to guide a company's technological progress. One very chilling story which exemplifies this comes from about 7-8 minutes into a Clojure talk: But really what this is is, "I'm afraid. Because I don't want to choose something that might put my job at ris…

[deleted]

Re: For High Tech Companies, Going Public Sucks

#22

Post by eli » Sun, Mar 25, 2012, 10:35 PM UTC

veyron wrote: post #16

eli wrote: post #12

Earlier quoted context omitted.

Did you read that article? Facebook more-or-less was forced to go public.

For posterity's sake let's make this clear: the SEC rule regarding 500 owners is as follows: > Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports. These reports are available to the public through the SEC's EDGAR database. Source: Securities Act of 1934, paraphrased in http://www.sec.gov/about/laws.shtml It requires firms to fil…

Right, besides the fact that they no longer have much to lose.

Re: For High Tech Companies, Going Public Sucks

#23

Post by ojbyrne » Sun, Mar 25, 2012, 10:39 PM UTC

I think Apple's performance in recent years must give some ammunition to execs who favor long-term goals over short-term goals. In addition Google has demonstrated that two-tier type stock voting schemes (like the one Facebook is going to use) can ameliorate many of the issues described.

Re: For High Tech Companies, Going Public Sucks

#24

Post by ojbyrne » Sun, Mar 25, 2012, 10:41 PM UTC

veyron wrote: post #8

Why doesn't anyone mention the private option? Multi-Billion dollar operations like Koch Industries are private. You aren't forced to go public per se.

Too many shareholders mean that you're forced to report like a public company. Then you might as well be public. Presumably Koch has only a few shareholders.

Re: For High Tech Companies, Going Public Sucks

#25

Post by veyron » Sun, Mar 25, 2012, 10:56 PM UTC

ojbyrne wrote: post #24

veyron wrote: post #8

Why doesn't anyone mention the private option? Multi-Billion dollar operations like Koch Industries are private. You aren't forced to go public per se.

Too many shareholders mean that you're forced to report like a public company. Then you might as well be public. Presumably Koch has only a few shareholders.

The article makes it sound like the SEC forces you to go public. You don't have to. It's a choice, as I explained here: http://news.ycombinator.com/item?id=3753915

Re: For High Tech Companies, Going Public Sucks

#26

Post by astrofinch » Sun, Mar 25, 2012, 11:38 PM UTC

>That may sound like suicide, but a recent study showed that most fast-growing US companies take no venture funding at all.

Where can I read it? This sounds like a better story than the article itself.

There should be a rule that journalists have to cite the studies they cite...

Re: For High Tech Companies, Going Public Sucks

#27

Post by akkartik » Mon, Mar 26, 2012, 3:46 AM UTC

"Look at it this way: When Apple went public in 1980, it had 54.2 million shares outstanding. It has since split three times, so those original 54.2 million shares have now become 434 million shares. But in fact, Apple currently has 929 million shares outstanding. Many of the extra 495 million shares—worth well over $200 billion, at current valuations—were issued over the years to pay for companies or people. And Apple isn’t even particularly acquisitive. All that equity has no value if there isn’t some way to convert it into cash eventually."

Surely AAPL with fewer shares would be worth a lot more per share. Markets pay keen attention to P/E.

Re: For High Tech Companies, Going Public Sucks

#28

Post by lani » Mon, Mar 26, 2012, 10:04 AM UTC

a million people who weren't smart enough to invent in the first place require that the few who DO invent, to do it in a way they understand and approve. where's the sense in that ? Asking high tech companies to 'drive' the economy as though they were bus drivers is like asking aviator-adventurists to fly passengers london-to-calais while filing daily status reports.