Hacker News Reader

Comment by almost_usual | Hacker News Reader

So are these companies rushing to IPO before a 'potential' recession occurs? Does anyone else not feel confident about this? It seems fear driven and not very calculated. Maybe I'm missing the bigger picture..

View on HN

The prep and planning required for these IPOs were done months before these market drops happened.

Right but why now? Why would I want to invest in a company that would implode without private investment when we might be facing an economic downturn?

I would assume that when we’re talking about billions of dollars that the people in charge of creating an IPO strategy are a bit more ahead of the markets than the rest of us right? Full disclosure I’m not knowledgeable in this area, but it would seem to me that this is the case and having made plans months before the market turns isn’t necessarily proof that it isn’t being done with market knowledge. Just a thought.

From what I read in Matt Levine's bloomberg column - not really. Bankers make money by being middle men, not predicting the market.

Yah, there are people in finance who try and work out what the market is doing, but those people aren't really the people who work in M&A banking.

Global markets have been in a downward spiral since the beginning of this year, esp ex US (where most of the growth has been), and if you look at the divergence between the growth this year between US companies, fewer and fewer companies have been holding up the market.

That is a meaningless statement. The decision to prepare is distinct from the decision to commit. It's farcical to imagine that these overvalued companies are just filing on sheer momentum. Doing it now is an affirmative decision. Also, the drop began two months ago and the signs of volatility where there in January.

To be fair, they have been talking of a 2019 IPO since more then a year ago.

Whatever the case, the exit-ramps are there at every stage and every moment until you do it. To play this as some kind of rolling ball that couldn't be stopped strains logic and seems basically counterfactual.

I disagree. I think the tension between getting your house in order enough to open your books to the public market and critically important employees waiting around for their stock-based compensation to trigger puts you between a rock and a hard place.

For Uber, it's do-or-die in 2019.

Definitely fear driven. Recently we've seen the biggest sustained downward drops in five years for tech stocks, I think beginning the process now is just too late.

Agreed.

FAANGMAN is down 22.4% from ATH, and probably in much better shape than Lyft or Uber. I'm probably going to wait for a pop in both prices of these (if they manage to go IPO anytime soon) and then short.

Facebook is down for obvious reasons. Apple struggles with sales and innovation. Amazon just made no sense to be rising like that. Some of the others have done fairly well in the recent shake up, like Microsoft for instance.

Microsoft is by far, the cleanest dirty shirt of those. Netflix, Google (Alphabet), AMD, Nvidia… yeah, no.

What’s the AN at the end?

AMD and NVIDIA maybe?

Alibaba and Nvidia.

Search for FAANGMAN in https://www.cnbcfix.com/fast-money-archive-june-2017.html

AMD, Nvidia

“Definitely?” I see articles on Lyft targeting an early/mid 2019 IPO at least as far back as August, months before the correction.

The timing may be fear driven, but the fact that they are going to IPO has been obvious for a very long time now. No reason not to go for it at this point.

Get out while the getting is good, as they say.

Launching before a recession is more ideal than before as funding would be easier to secure from the public vs private institutions especially if they continue losing money at this rate.

I’m assuming the second “before” should be an “after”?

Right but all this tells me is that the company will implode without further investment. The fact they are rushing to IPO seems like the private investors are wanting the average joe to be holding the bag when it does implode.

Most big tech IPOs these days are just for the founders to cash out. Look at facebook's, they were essenitally done growing and innovating, the IPO was just a means for execs to cash in their stock at inflated rates.

Something similar might happen here with Uber... we will see.

Reply on news.ycombinator.com