IPOs and right to match

Long time readers of the blog might know that I’m not a big fan of the IPO pop. I’ve traditionally belonged to the party (led by Bill Gurley) that says that a big IPO pop is akin to “leaving money on the table” for the company. And so as my party has grown, the IPO … Continue reading “IPOs and right to match”

Revisiting IPOs

I’ve written several times (here, here and here) that the IPO pop is unfair to existing shareholders since they end up selling the stock cheaper than necessary. Responses I’ve received to this (not all on the blog comments) have mostly been illogical and innumerate, talking about how the pop “increases the value of the entrepreneurs’ holdings”, … Continue reading “Revisiting IPOs”

IPOs Revisited

I’ve commented earlier on this blog about investment bankers shafting companies that want to raise money from the market, by pricing the IPO too low. While a large share price appreciation on the day of listing might be “successful” from the point of view of the IPO investors, it’s anything but that from the point … Continue reading “IPOs Revisited”

Successful IPOs

Check out this article in the Wall Street Journal. Read the headline. Does this sound right to you? MakeMyTrip Opens Up 57% Post-IPO; May Be Year’s Best Deal It doesn’t, to me. How in the world is the IPO successful if it has opened 57% higher in the first hour (it ended the first day … Continue reading “Successful IPOs”

More On Direct Listings

Regular long-time readers of this blog might know that I’m not a big fan of IPO pops (I’ve written about them at least four times so far: one, two, three and four). You can think of this as Number Five, though this is specifically about Direct Listings. In case you don’t have patience to click … Continue reading “More On Direct Listings”

Direct listing

So it seems like Swedish music streaming company Spotify is going to do a “direct listing” on the markets. Here is Felix Salmon on why that’s a good move for the company. And in this newsletter, Matt Levine (a former Equity Capital Markets banker) talks about why it’s not. In a traditional IPO, a company … Continue reading “Direct listing”

Tiered equity structure and investor conflict

About this time last year, I’d written this article for Mint about optionality in startup valuations. The basic idea there was that any venture capital investment into startups usually comes with “dirty terms” that seek to protect the investor’s capital. So you have liquidity preferences that demand that the external investors get paid out first … Continue reading “Tiered equity structure and investor conflict”

Aswath Damodaran, Uber’s Valuation and Ratchets

The last time I’d written about Aswath Damodaran’s comments on Uber’s valuation, it was regarding his “fight” with Uber investor Bill Gurley, and whether his valuation was actually newsworthy. Now, his latest valuation of Uber, which he concludes is worth about USD 28 Billion, has once again caught the attention of mainstream media, with Mint writing … Continue reading “Aswath Damodaran, Uber’s Valuation and Ratchets”