51–60 of 121 posts
We need a better mechanism for companies to go public. The traditional IPO is a ripoff and SPACS are scams. It's great that companies like MariaDB are able to raise money in public markets, though.
Direct listings seem fine-ish.
"About 99% of the shareholders of special purpose acquisition company Angel Pond got their money back before the merger was completed, wiping out about nearly $263 million in capital that the companies had projected could be raised in the deal."
That's my problem with SPACs. The people who put them together walk away with all the money. IronNet, 23andMe, and Adstra, had similar drops.
- sponsors create a spac selling shares+warrants for, say, $10
- they have two years to merge with a company
- when the merger is sorted, shareholders can choose either (a) to get their money back + 3%, (b) to get their share in the resulting company and discard their warrant, or (c) to get their share and exercise their warrant to buy another share at some potentially good price
- the sponsors get 20% of the pre-warrant equity in the spac’s investment. I think they might have a long lock-out period before they can sell too
- if no merger happens, investors get back their money with interest.
So maybe I don’t understand what you mean, or maybe I don’t understand what a spac is, but isn’t it bad for the sponsors if the shareholders don’t like the merger? Maybe it’s more subtle and it is a lot worse than coming up with a good merger but still better than not doing the spac at all.
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Direct listings seem fine-ish.
That's a bit '-ish'. The bar is too high and there are huge numbers of really decent companies that need some kind of liquidity. We're just not set up for it. Maybe it's a matter of just bringing more attention to small caps, I don't know. Or another vehicle. There are just too many truly great value creating business out there whereupon it's very difficult for founders to get their accumulated value out of it. Peopl…
We need a better mechanism for companies to go public. The traditional IPO is a ripoff and SPACS are scams. It's great that companies like MariaDB are able to raise money in public markets, though.
I’m also not very convinced that IPOs are a rip-off FWIW.
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One possible reason why rich people do this, is that they like making money, which got them rich in the first place. Liking to make money and liking to enjoy money are different traits, I suppose.
> Liking to make money and liking to enjoy money are different traits, I suppose. I get that. My dad was never that excited about making money, but he still described TurboTax as his favorite video game. Sometimes you just want to optimize the number, no matter what the number is.
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> It's actively used by many companies in production The problem is not many of them want to pay for it. $40 million in ARR after 13 years and $227 million in funding isn't great.
I didn’t even know you could pay for it
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> It's actively used by many companies in production The problem is not many of them want to pay for it. $40 million in ARR after 13 years and $227 million in funding isn't great.
I didn’t even know you could pay for it
We need a better mechanism for companies to go public. The traditional IPO is a ripoff and SPACS are scams. It's great that companies like MariaDB are able to raise money in public markets, though.
We need a better mechanism than going public. That only leads to the inevitable next-quarter-itis that has taken down once great companies like HP and Bell Labs.
Our current model of “must have quarter over quarter growth” is a good a check in theory but it’s too easy to cut corners in the short term instead of solving systemic, organizational problems which just kicks the can down the road.
SPACs are setup by people who couldn’t figure out how to launch a DAO token scam.
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We need a better mechanism than going public. That only leads to the inevitable next-quarter-itis that has taken down once great companies like HP and Bell Labs.
We need a new exchange that focuses on driving profits for shareholders over a longer term especially ones with wider goals. I think there is a market desire for companies that have positive social or public goals but still make sense organized as a for-profit. What we might get is less pan-flash/hyper-growth-startup-IPO and more organically grown companies with a certain amount of staying power and positive social o…
The fundamental change seems to have been circa 1960’or so, when stocks went from being things that earned a dividend - and the dividend is where most of the return came from, to most companies reducing and then stopping dividends altogether.