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Dropbox Shares Offered at 34% Discount in Secondary Market

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Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#21

Post by throwaway7798 »

jfoutz wrote: post #8
frogpelt wrote: post #4

Buzzfeed is reporting stock offerings? Who knew?

Buzzfeed news is pretty good. You won't believe how they fund serious journalism. #8 will shock you. But seriously, they do seem to have a commitment to producing quality news. [1] for example. [1] http://www.nytimes.com/2013/10/22/business/media/buzzfeed-hi...

I strongly disagree. They produce a lot of biased news geared against startups in Silicon Valley. It almost feels like they're anti-startup news feed. And reading them, as an employee of a startup makes me feel pessimistic and depressed.

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#22

Post by state »

p4wnc6 wrote: post #12
sharkweek wrote: post #11

If I'm an employee at [HIGHLY VALUED PRIVATE COMPANY] - this looks REALLY appealing to me, to dump my shares for at least a nice guaranteed cash out now. So many VC rounds protected with liquidation preferences at a valuation that the market probably ends up shredding if there's an IPO or a buyer comes along to acquire the company. These latest devaluations certainly wouldn't help with morale and I'd get nervous thin…

Most employees would be in a situation where right of first refusal means their employer would have to approve this -- and in a lot of places, the employer's going to take it as a red flag that you want to sell and it could create problems.

Could someone (perhaps with a throwaway or a 'wink') corroborate or elaborate on this? I'm very curious to know (anecdotally) how the politics of these sales work.

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#23

Post by avelardi »

msoad wrote: post #19

The bigger story is that Dropbox is trending down in general. Look at Google Trends[1] for Dropbox searches. I used to have files. But now I don't really have any files. I use Spotify for music. A collection of streaming services for movies and shows. Google Photos for my photos. Google Docs for storing my spreadsheets and "word" documents and Google Drive to dump some useful PDF files. I don't pay for any storage se…

Also factor in their limited services. Why would I use dropbox when I can use a service such as Google to handle multiple services in one place?

Also, file storage is a commodity at this point. Differentiating your cloud storage solution from the others only matters when you offer something other companies do not.

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#24

Post by andrewstuart2 »

msoad wrote: post #19

The bigger story is that Dropbox is trending down in general. Look at Google Trends[1] for Dropbox searches. I used to have files. But now I don't really have any files. I use Spotify for music. A collection of streaming services for movies and shows. Google Photos for my photos. Google Docs for storing my spreadsheets and "word" documents and Google Drive to dump some useful PDF files. I don't pay for any storage se…

We should really stop looking to Google Trends to infer the popularity of a subject (something I've been guilty of as well!). The number of searches can't be completely correlated to the popularity, because as word-of-mouth and general knowledge of a service builds, the more likely people are to go directly to that service and not perform a Google search.

Additionally, Google trend numbers are relative to all historic search activity. As Google's market share changes over time, that's likely to impact what Trends shows as well, skewing the correlation with subject popularity even further.

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#25

Post by joshjkim »

state wrote: post #22
p4wnc6 wrote: post #12

Earlier quoted context omitted.

Most employees would be in a situation where right of first refusal means their employer would have to approve this -- and in a lot of places, the employer's going to take it as a red flag that you want to sell and it could create problems.

Could someone (perhaps with a throwaway or a 'wink') corroborate or elaborate on this? I'm very curious to know (anecdotally) how the politics of these sales work.

This is a copy/paste from a prior HN discussion that I had:

[it's definitely true] that employees are discouraged from seeking buyers because there is an unspoken implication that this means the employee is "losing faith" or "believes less" in the company, or is getting ready to leave.

If the party line is: "hey, we are going to be a billion dollar company!" and then one employee says "hey, I want to sell at this $100M valuation", even if the $100M is a solid upside from the employees strike price the next natural question for the founder is: "hey, why would you sell at this valuation if we all know we are going to unicorn?" Lots of people are reasonable and could understand many good reasons to sell at that point, but in high-growth culture those are not always appreciated. Sure, employee can/should suck it up, but it still makes it more challenging.

Generally, I think this is why company's should more regularly organize secondaries, it removes this dynamic to a certain extent.

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#26

Post by toomuchtodo »

andrewstuart2 wrote: post #24
msoad wrote: post #19

The bigger story is that Dropbox is trending down in general. Look at Google Trends[1] for Dropbox searches. I used to have files. But now I don't really have any files. I use Spotify for music. A collection of streaming services for movies and shows. Google Photos for my photos. Google Docs for storing my spreadsheets and "word" documents and Google Drive to dump some useful PDF files. I don't pay for any storage se…

We should really stop looking to Google Trends to infer the popularity of a subject (something I've been guilty of as well!). The number of searches can't be completely correlated to the popularity, because as word-of-mouth and general knowledge of a service builds, the more likely people are to go directly to that service and not perform a Google search. Additionally, Google trend numbers are relative to all histori…

Let's try a different method then. Is Dropbox's valuation in line with their business fundamentals? Supposedly, no:

https://www.cbinsights.com/blog/dropbox-valuation-bubble/

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#27

Post by B1FF_PSUVM »

throwaway7798 wrote: post #21
jfoutz wrote: post #8

Earlier quoted context omitted.

Buzzfeed news is pretty good. You won't believe how they fund serious journalism. #8 will shock you. But seriously, they do seem to have a commitment to producing quality news. [1] for example. [1] http://www.nytimes.com/2013/10/22/business/media/buzzfeed-hi...

I strongly disagree. They produce a lot of biased news geared against startups in Silicon Valley. It almost feels like they're anti-startup news feed. And reading them, as an employee of a startup makes me feel pessimistic and depressed.

News in general will make you feel pessimistic and depressed. If not enraged.

Don't do news.

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#28

Post by maaku »

smaili wrote: post #18
putlake wrote: post #15

As others have noted, you could attribute the entire 34% "discount" to the fact that these are common shares, not preferred. A few months ago when I looked into investing in Palantir via EquityZen/Sharespost, the share price being offered valued Palantir at between 25-30% less than their most recent funding round valuation of $20B. If anyone's interested in acquiring pvt company shares in the secondary market, here's…

What if the company were to be acquired?

Payouts the same as the underlying shares.

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#29

Post by maaku »

p4wnc6 wrote: post #12
sharkweek wrote: post #11

If I'm an employee at [HIGHLY VALUED PRIVATE COMPANY] - this looks REALLY appealing to me, to dump my shares for at least a nice guaranteed cash out now. So many VC rounds protected with liquidation preferences at a valuation that the market probably ends up shredding if there's an IPO or a buyer comes along to acquire the company. These latest devaluations certainly wouldn't help with morale and I'd get nervous thin…

Most employees would be in a situation where right of first refusal means their employer would have to approve this -- and in a lot of places, the employer's going to take it as a red flag that you want to sell and it could create problems.

Doesn't the right of first refusal mean that company has the right to buy the shares (at the same price)?

Still not a wise thing to do if you're employed there.

Re: Dropbox Shares Offered at 34% Discount in Secondary Market

#30

Post by p4wnc6 »

maaku wrote: post #29
p4wnc6 wrote: post #12

Earlier quoted context omitted.

Most employees would be in a situation where right of first refusal means their employer would have to approve this -- and in a lot of places, the employer's going to take it as a red flag that you want to sell and it could create problems.

Doesn't the right of first refusal mean that company has the right to buy the shares (at the same price)? Still not a wise thing to do if you're employed there.

Yes, that's correct. The point is that your employer gets to be alerted to this -- not that they could block you or something.

If you're happy to sell the shares and work somewhere else, then there's no real problem either way. But if you actually like your job and you just simply prefer to realize a cash distribution from the compensation you earned in the form of equity, and your employer would disapprove of you having this preference, it can be a tricky situation.

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