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And then the music stopped

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Re: And then the music stopped

#61

Post by achompas »

ChuckMcM wrote: post #15

"So between just these three, some $40 billion has been extracted from pension funds and other last-sucker-in-line investors." This is incorrect, David takes the change in market cap and then equates that to losses in pension funds. But this does not represent the state of affairs because when companies go public they don't put all of their stock on the market, rather they put a small percentage of the company on the…

There's the bigger issue of DHH picking up his sword and shield yet again and hacking at a strawman with a big "VC" note pinned to the head.

We get it, DHH. Generating consistent revenue streams, buying nice offices, and raving about VCs is the only righteous and pure road.

I mean, who is he rallying at this point? Any entrepreneur with half a brain knows that taking VC money, growing explosively, and trying to IPO is a perilous road. What are we gaining here, aside from more vitriol?

Re: And then the music stopped

#62

Post by ChuckMcM »

tatsuke95 wrote: post #59
ChuckMcM wrote: post #57

Earlier quoted context omitted.

Trust me it isn't newsworthy. Granted two of them made it into the top 5 but hey those folks who bought BRHM, they are feeling some real hurt now. [1] http://www.nasdaq.com/markets/ipos/performance.aspx

> "Trust me it isn't newsworthy" I didn't realize you decided what is and isn't newsworthy. A tad arrogant, no? I prefer the market method: if it makes the news, it's newsworthy. Outside of Michael Kors, I don't know a single company on that list. Meanwhile, Zynga and even moreso Groupon are what you might call "famous". The fact that they both appear on the list of worst performing IPOs is newsworthy. But I'm no aut…

Ok, I will assume you're not trolling here, you wrote this in the antecedent:

"I don't see how anyone can claim that these companies having their share prices slashed in half within a year of their IPOs isn't newsworthy."

I responded with a link to the NASDAQ's performance website, which if you look through it will see that there are a lot of companies who lose over half their value within a year of their IPOs. In fact, a number of studies have shown that it is typical for a company to lose value post IPO during its first year.

On that basis, and on the basis that reporting on typical behavior is not 'news', I make the claim that simply losing half their value post IPO is not, by definition, newsworthy.

Re: And then the music stopped

#63

Post by larrys »

achompas wrote: post #61
ChuckMcM wrote: post #15

"So between just these three, some $40 billion has been extracted from pension funds and other last-sucker-in-line investors." This is incorrect, David takes the change in market cap and then equates that to losses in pension funds. But this does not represent the state of affairs because when companies go public they don't put all of their stock on the market, rather they put a small percentage of the company on the…

There's the bigger issue of DHH picking up his sword and shield yet again and hacking at a strawman with a big "VC" note pinned to the head. We get it, DHH. Generating consistent revenue streams, buying nice offices, and raving about VCs is the only righteous and pure road. I mean, who is he rallying at this point? Any entrepreneur with half a brain knows that taking VC money, growing explosively, and trying to IPO i…

"other last-sucker-in-line investors bought into."

Not to mention saying things like the above.

You don't know that you are the "last-sucker-in-line" until the music stops. As the saying goes you can't time the market until of course after the fact.

Re: And then the music stopped

#64

Post by tatsuke95 »

ChuckMcM wrote: post #62
tatsuke95 wrote: post #59

Earlier quoted context omitted.

> "Trust me it isn't newsworthy" I didn't realize you decided what is and isn't newsworthy. A tad arrogant, no? I prefer the market method: if it makes the news, it's newsworthy. Outside of Michael Kors, I don't know a single company on that list. Meanwhile, Zynga and even moreso Groupon are what you might call "famous". The fact that they both appear on the list of worst performing IPOs is newsworthy. But I'm no aut…

Ok, I will assume you're not trolling here, you wrote this in the antecedent: "I don't see how anyone can claim that these companies having their share prices slashed in half within a year of their IPOs isn't newsworthy." I responded with a link to the NASDAQ's performance website, which if you look through it will see that there are a lot of companies who lose over half their value within a year of their IPOs. In fa…

Not trolling at all.

GRPN and ZNGA are not just some obscure companies; they're incredibly well known, well hyped, and used daily by millions of people.

Yes, IPOs flare out all the time. But the NASDAQ is huge. You can't honestly compare these two companies with a tiny, speculative penny stock. Groupon and Zynga went public with multi-billion dollar valuations. These are massive companies. I know people who lost money on them. You'd be hard pressed to find anyone who has even heard of these others, let alone actually invested in them.

That's why it's news-worthy. That's my point.

Edit:

>"which if you look through it will see that there are a lot of companies who lose over half their value within a year of their IPOs."

Indeed. I'm actually shocked that both Zynga and Groupon made the top five. When you look at who they were anti-competing with, that's insane.

Re: And then the music stopped

#65

Post by larrys »

46Bit wrote: post #43
carsongross wrote: post #33

I'm sure I'll burn karma, but let me say it again: there are companies out there generating real, long term value, but the HN news stream ignores most of them. A perfect example is Guidewire, the company I worked for previously, which is up nearly double its IPO price and is rocking the earnings, which has been voted the best place to work in Silicon Valley for two straight years, and which has contributed a JVM lang…

Consumer Internet companies get far more attention than they deserve because their business model involves using your time. There's a massive number of far more interesting, profitable companies in tech that you rarely if ever hear about.

"Consumer Internet companies get far more attention than they deserve"

There is an agenda on HN just like there is an agenda on avc.com by Fred Wilson, or for that matter Techcrunch, or the NY Times.

Which is fine. It's their sandbox and they can run it any way they want. It doesn't cost anything to read so therefore as the much overused at this point saying goes "we are the product". (There are of course other things mixed in there of course but the bias is apparent. I'm not seeing anyone else able to post "help wanted" on HN but YC companies.)

Re: And then the music stopped

#66

Post by larrys »

unreal37 wrote: post #25

Plenty of people were warning about Groupon and Zynga being unsustainable businesses BEFORE they went IPO, and I have no sympathy for those that played that risky game. It's disingenuous to be outraged about those two stocks being below the IPO price when it was a common sentiment before they went IPO. Facebook is actually a real business, making $1B/quarter in revenue. Maybe they should have went IPO at $8 and allow…

"the stock market is not a place for individual investors"

It's very difficult to make money in stocks unless there is something you know that most others don't know about the company or it's prospects.

So if you know about security and know of a security company going public and something about the people at the company and the business prospects (not talking insider just a higher degree of understanding or knowledge) you might be able to do ok.

However I've found that even in things you know about it's hard to make it all work because you really don't know the behind the scenes things happening at the particular company you are investing in (which would be insider information). I'm reminded about this anytime I think about investing in Verisign which I know much of from the industry and the fact that I've been dealing with them for so many years and I haven't ever been that right in predicting where the stock is going to go based upon the way I see things since that is not the same as the way the market sees things. That said I probably have a better time and stand a better chance then someone who knows less than I do. I don't invest in stocks. It's gambling. Business is a gamble as well but at least you can control many things and improve your odds.

Re: And then the music stopped

#67

Post by aswanson »

harold wrote: post #30

Those "last-sucker-in-line-investors" could have also invested in LinkedIn [1] and Zillow [2], both of which have done reasonably well after their IPO. Easy to pick a company to use to reinforce a message (37 Signals would have made a better case against non tech company GM [3], which had hype and government assistance and is still on the way down) [1] http://finance.yahoo.com/q/bc?s=LNKD+Basic+Chart&t=2y [2] http://…

Linkedin is trading at 698 times earnings. I'm siding with DHH in the long run on that one.

Re: And then the music stopped

#68

Post by microtherion »

tatsuke95 wrote: post #64
ChuckMcM wrote: post #62

Earlier quoted context omitted.

Ok, I will assume you're not trolling here, you wrote this in the antecedent: "I don't see how anyone can claim that these companies having their share prices slashed in half within a year of their IPOs isn't newsworthy." I responded with a link to the NASDAQ's performance website, which if you look through it will see that there are a lot of companies who lose over half their value within a year of their IPOs. In fa…

Not trolling at all. GRPN and ZNGA are not just some obscure companies; they're incredibly well known, well hyped, and used daily by millions of people. Yes, IPOs flare out all the time. But the NASDAQ is huge. You can't honestly compare these two companies with a tiny, speculative penny stock. Groupon and Zynga went public with multi- billion dollar valuations. These are massive companies. I know people who lost mon…

GKNT (The artist formerly known as LNUX, a.k.a VA Linux) makes Zynga & Groupon look like amateurs:

http://finance.yahoo.com/q/ta?s=GKNT+Basic+Tech.+Analysis&#3...

Re: And then the music stopped

#69

Post by tatsuke95 »

microtherion wrote: post #68
tatsuke95 wrote: post #64

Earlier quoted context omitted.

Not trolling at all. GRPN and ZNGA are not just some obscure companies; they're incredibly well known, well hyped, and used daily by millions of people. Yes, IPOs flare out all the time. But the NASDAQ is huge. You can't honestly compare these two companies with a tiny, speculative penny stock. Groupon and Zynga went public with multi- billion dollar valuations. These are massive companies. I know people who lost mon…

GKNT (The artist formerly known as LNUX, a.k.a VA Linux) makes Zynga & Groupon look like amateurs: http://finance.yahoo.com/q/ta?s=GKNT+Basic+Tech.+Analysis&#3...

Hey, they're still in business! There are more than a few businesses that went public in 2000 that weren't so lucky.

Pretty epic chart, though.

Re: And then the music stopped

#70

Post by s_henry_paulson »

larrys wrote: post #66
unreal37 wrote: post #25

Plenty of people were warning about Groupon and Zynga being unsustainable businesses BEFORE they went IPO, and I have no sympathy for those that played that risky game. It's disingenuous to be outraged about those two stocks being below the IPO price when it was a common sentiment before they went IPO. Facebook is actually a real business, making $1B/quarter in revenue. Maybe they should have went IPO at $8 and allow…

"the stock market is not a place for individual investors" It's very difficult to make money in stocks unless there is something you know that most others don't know about the company or it's prospects. So if you know about security and know of a security company going public and something about the people at the company and the business prospects (not talking insider just a higher degree of understanding or knowledg…

>It's very difficult to make money in stocks unless there is something you know that most others don't know about the company or it's prospects.

Look at a chart of Amazon or Apple over the past 4 years and tell me that you'd need some sort of special expertise to see value in these companies.

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