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IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

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Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#91

Post by ummonk »

jjuhl wrote: post #29
rayhano wrote: post #20

I posted this article because we’re planning to do the same and wanted to gather thoughts from the tech community (the financial community has commented on this sufficiently to help inform our process). I thought it might help to share our motivations for eventually listing our company vs taking more VC: a. The public markets force transparency. This aligns with our values. b. Governance enforced by VCs (especially i…

Why are you trying to provide "reasons"? You'r a company. You just want to make the maximum amount of money. Everyone knows this. Why try to pretend anything else?

That's wrong. A company's goal is to provide a worthwhile good or service. It does this effectively by generating profits that can be reinvested into growing its services or goods. And when it can no longer efficiently reinvest its profits to providing a better service or good, it instead returns the profits to shareholders so that they may reinvest those profits into companies that can better utilize the capital to provide useful goods or services.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#93

Post by gammateam »

ironjunkie wrote: post #39
nkohari wrote: post #36

Earlier quoted context omitted.

Not sure what you mean by this. Most retirement accounts are investment portfolios. I don't think they meant that people should reinvest their entire portfolio in the offering, or invest money they couldn't afford to lose.

I think he means that stock picking is way more dangerous than a well diversified "safe" Fund like most retirement accounts push you to invest in (with high management fees of course).

don't forget about the mad gainz you get from an Ally savings account with 1.5% interest

edit 1.75%

extra tennis balls for your walker

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#94

Post by beambot »

mathattack wrote: post #83
eldavido wrote: post #56

Earlier quoted context omitted.

Yes and no. I read in Brealey-Myers [1] that you can get 80-90% of the way to pure beta (market risk) by picking 15-20 stocks. You just have to pick ones that aren't super correlated, e.g. 10 pharmaceutical companies. Whether it's worth your time messing about with this is a separate matter entirely. [1] https://www.amazon.com/Principles-Corporate-Finance-Richard-...

Much easier to just buy an index.

Yes & no.

Buying individual stocks lets you exercise some level of moral control over which companies you tacitly back. Don't want to support diabetes-inducing sugar water? Then avoid soda companies. Don't want to support environmentally-unsound logging, mining, or petro companies that exploit unregulated externalities? Great, you can select the ones that don't. Don't want to back companies that exploit 3rd-world sweathshops -- there again, you can.

Investment dollars are like voting... and generally speaking, picking individual stocks is akin to evaluating a politician based on their policies rather than voting strictly along party lines.

(Edit: as an aside, you can find "Socially Conscious" ETFs to help offset this concern.)

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#95

Post by zone411 »

ericd wrote: post #73
JamesBarney wrote: post #70

Earlier quoted context omitted.

>Whether it's worth your time messing about with this is a separate matter entirely. Yeah, transaction fees can really eat into your gains unless you're a very good picked or are interesting millions.

Eh these are trending to zero pretty quickly, and with buy and hold plus yearly rebalancing, you're not really doing that many transactions anyway.

I wouldn't use brokers that have zero fees but yes, the transaction fees are not that high.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#96

Post by snowmaker »

mrep wrote: post #92

Ignorant question: why don't most companies do this to avoid the fees?

Because historically IPO's were about raising money for the company. It's only recently that the companies going public are so late stage that they don't need any more money.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#97

Post by jerguismi »

erispoe wrote: post #30
rayhano wrote: post #20

I posted this article because we’re planning to do the same and wanted to gather thoughts from the tech community (the financial community has commented on this sufficiently to help inform our process). I thought it might help to share our motivations for eventually listing our company vs taking more VC: a. The public markets force transparency. This aligns with our values. b. Governance enforced by VCs (especially i…

> e. Friends and family and supporters can participate - especially from their retirement accounts. This is really important - the wealth creation being broad has a real good-news feel. Sharing the wealth. It's a really bad idea to do stock picking, or any other risky investment strategy, with your retirement account, and a really bad idea to promote it. One company goes bust and suddenly you lost your retirement sav…

> It's a really bad idea to do stock picking, or any other risky investment strategy, with your retirement account, and a really bad idea to promote it. One company goes bust and suddenly you lost your retirement savings. Or your parents did and you'll have to explain them why they'll have to continue working in their 70s and 80s.

Quite bad idea to have all eggs in one account, but with proper diversification the risks are lower.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#98

Post by rayhano »

JumpCrisscross wrote: post #60
rayhano wrote: post #20

I posted this article because we’re planning to do the same and wanted to gather thoughts from the tech community (the financial community has commented on this sufficiently to help inform our process). I thought it might help to share our motivations for eventually listing our company vs taking more VC: a. The public markets force transparency. This aligns with our values. b. Governance enforced by VCs (especially i…

> Secondaries - shares sold by employees or early investors - can be sold at any time, at fair market value This is a consistently under-appreciated part of modern venture markets. (Disclaimer: it's also one I'm involved with.) Spotify did $16 to 20 billion of private secondaries in just the first month and a half of 2018 [1]. This gave shareholders public-like liquidity, reducing pressure on management. It also gave…

Amazing, thanks for sharing. It may also be because they had some many rounds in private that other ‘non-Unicorns’ might not have the luxury of.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#99

Post by brianwawok »

beambot wrote: post #94
mathattack wrote: post #83

Earlier quoted context omitted.

Much easier to just buy an index.

Yes & no. Buying individual stocks lets you exercise some level of moral control over which companies you tacitly back. Don't want to support diabetes-inducing sugar water? Then avoid soda companies. Don't want to support environmentally-unsound logging, mining, or petro companies that exploit unregulated externalities? Great, you can select the ones that don't. Don't want to back companies that exploit 3rd-world swe…

> Don't want to support diabetes-inducing sugar water? Then avoid soda companies.

So thought experiment on this. Say 49.5% of the world buys pure index fund. 49.5% of the world what you said... and say, all avoided Pepsi stock. Wouldn't that mean that Pepsi stock is undervalued from a PE standpoint, and the 1% of investors left would go 100% in Pepsi, and make a crapload of money?

I totally get voting with your money. If you think some company is absurd for some reason, avoid buying their product. But to avoid buying stock? I think all you do is create an investment opportunity for someone savvy with numbers to make big money, and the company feels no different.

Please correct me if I am wrong though, I might be missing something in this argument.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#100

Post by mywittyname »

brianwawok wrote: post #99
beambot wrote: post #94

Earlier quoted context omitted.

Yes & no. Buying individual stocks lets you exercise some level of moral control over which companies you tacitly back. Don't want to support diabetes-inducing sugar water? Then avoid soda companies. Don't want to support environmentally-unsound logging, mining, or petro companies that exploit unregulated externalities? Great, you can select the ones that don't. Don't want to back companies that exploit 3rd-world swe…

> Don't want to support diabetes-inducing sugar water? Then avoid soda companies. So thought experiment on this. Say 49.5% of the world buys pure index fund. 49.5% of the world what you said... and say, all avoided Pepsi stock. Wouldn't that mean that Pepsi stock is undervalued from a PE standpoint, and the 1% of investors left would go 100% in Pepsi, and make a crapload of money? I totally get voting with your money…

I feel like this is a perfect example of "put your money where you mouth is."

If you are outraged over soft drinks, then you should own soft drink stock so that, A) you have some influence over their operations, B) you're shouldering some of the risks associated with moving to a safer product.

If you avoid a company completely (purchasing neither their stock nor poduct), then they have absolutely no reason to listen to you, so you're only remaining option is regulation.

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