Tech Unicorns Are Going Public at Near-Record Pace

Similar experience.

A VC told me that "Money is flowing freely right now" and to "take advantage of it".

Implicit message was that it won't be this way in the near future and now is the time to jump on the wagon.

It's been common knowledge since the end of the last recession that a recession is just around the corner. It's always common knowledge that a recession is just around the corner.

It's a non falsifiable position because if a recession doesn't happen for another 5 years, they'll just say that 5 years was what they mean by just around the corner.

It seems nearly everyone always believes that a recession, big disaster slowdown, market crash, Etc is "right around the corner." And for the last 10 years they have been wrong in the macro sense :-).

That said, this was from the article: "Many of the tech companies that listed shares in the U.S. were based in China, including some of the largest IPOs of the year, such as online-entertainment services company iQIYI Inc. and Chinese e-commerce company Pinduoduo Inc."

The Chinese economy is reacting in all sorts of ways to its new larger size, pressure from the US in trade wars, and pressure at home to spread some of the prosperity around. If you take all of the Chinese companies out of the list, the IPO statistic is unremarkable.

What I find most interesting is the Unicorn do or die issue. Which is that many may find it impossible to go to the private equity trough again, that bubble does seem to have deflated. Valuations aside, when you have raised over a billion dollars that is real money that somebody is going to miss it if you just roll up the carpets and go home.

It felt to me that the collapse of Theranos woke up a lot of 'stupid' money (that is money from people who are investing in a fad but without research). And those folks have said, "Hmm, ok now I'd like to sell my equity in this company you guys say is worth $X, that means you will pay me $Z for my stake right?" Only to find it doesn't work that way, there are no buyers, no liquidity as they say, for those preferred shares. But they can vote and they can tell the CEO, you're not getting another penny from us, we'd like to sell our shares. And that leaves the public markets as the investor of last resort.

So it does feel like a Unicorn reckoning is to be had. Where companies will have to prove that a cruel and unemotional market will agree with their lofty valuations. They won't all make it over that hump. As the Vikings might say, "There will be songs sung about these days."

The crash has already begun, a global recession will follow after but that won't be till later next year. We're in a correction and entering a bear market.

https://finance.yahoo.com/chart/%5EIXIC

Stocks like Amazon and Apple have lost up to 30% in the last few months, and Nasdaq has seen steep declines since the summer. So yes, earlier this year was a good time to IPO. Talking about exiting now with an IPO is definitely a little late, and I pity companies like Uber which have one scheduled for next year.

There seems to always be fear mongering by people who benefit from the "opportunities" created by the suffering of those most vulnerable whenever there is a sufficient amount of fear, uncertainty, and doubt pumped into the public mind to create an economic pull back. Or maybe they are Russian agents attempting to attack the US economy? Either way, the best advice is generally: don't read the comments, there's too much toxicity, manipulation, and disinformation

It's not "recession around the corner" as a main driver. Market is great now, but that will change when they interest rates go up, hence people wanna catch this boat before it sails.

I think this is the thinking: get while the getting is good, before the Trump Slump hits.

> that a recession is just around the corner.

I'm sure economists/data-scientists have models for that, and if there would be any obvious sign, we would know it by now.

Lots of newly IPO'd tech companies during the last Dotcom bubble survived through it and eventually grew to be prominent companies today. Many of their share prices were down >80% in the years afterwards, but the cash raised through IPOs were crucial to help them survive and expand. An exit via IPO now is better than trying to do a founding round in the middle of a recession when you are low on cash again.

> it seems to be common knowledge in the startup community( and everywhere else? ) that a recession is just around the corner.

Is it based on gut feeling or something else? Because there has been talk of recession since the last recession. People talking about how the last recession is going to become bigger and bigger.

And while stock and other assets form the bigger outer picture where people can see the recession that is not the complete picture. One of the biggest things happens during recession is risk aversion.

So, people stop investing in risky assets like stocks and riskier stuff like equity in startups are worse off. This has a knock on effect where companies have less money to spend on stuff. So, they cut down on spending which then affects projects, jobs etc.

That said, we don't really have a strict metric to actually gauge if recession has arrived. Some believe in looking at oil prices while others at fiscal deficits.

I personally believe in Michael Burry's (from The Big Short) interpretation of recession. In his 2006 letter he said:

Take (the company) Nordstrom, a higher-end retailer benefiting from most every macro trend today. Its 11,5% pre-tax margin in 2005 surpassed 10% for the first time since the company went public in 1971, and its margins rose from 1,5% to greater than 7% in the last four years. Net income is five times what it was in 2001, and return on equity rose nearly fourfold. Similar stories abound, though not necessarily to all to this degree. If this is not a peak in a dramatic debt-fueled economic boom, well, it certainly looks like one.

We are seeing something similar happen right now. But it certainly doesn't mean that recession is just around the corner, rather it is slowly coming.

Interestingly, 2007-2009 is exactly the period during which Airbnb, Uber, Dropbox, Github, Spotify, Quora, Evernote and Kickstarter were founded.

I remember reading the same sometime ago, and on reading this headline, I was glad for a little while until I started reading the comments.

I think the bubble is ending. They want to convert their phantasy money into cold hard cash from retail investors (aka "suckers") before it's too late.

Surely, and I think it will be dramatic to the top 4 + Facebook.

You can say that AAPL is slipping because this years model doesn't look different or whatever, but what about the others? They are hard crashing.

(There were two trillion dollar companies but now there's no company above 800 billion)