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Comment by minimaxir | Hacker News Reader

...is there a reason a ton of tech startups are dropping their IPOs today?

With the sole exception of Aug 1999 - Feb 2000, public technology companies have never before commanded such high earnings multiples as we have now.

It would be a dereliction of fiduciary duty for executives and boards NOT to fleece the public for cash right now.

I mean, the driver for these record high multiples is that the Fed has made it very clear that cash will be extremely abundant over the next couple years, and hence worth a lot less. It would be a dereliction of duty for those public investors to not get rid of it ASAP and put it into scarce resources, like the stock of hot Silicon Valley companies.

The folks who are the real losers are any suckers who think they're going to get by with a fixed wage, particularly if they're in a competitive labor market.

"tech startups" are IPOing almost daily. Happened to be a couple of big names today.

https://sec.report/Form/S-1

OP means in general, and to be fair the tech IPO market post financial crisis has actually been fairly weak. the number of tech IPOs happening right now is at multi year highs

Today specifically? Not sure.

In today's climate? Yes. To give you an idea:

The overall market is being carried by 5 companies...all "tech" companies:

https://www.putnam.com/advisor/content/perspectives/7816

And most of the high growth SaaS companies are up YoY...by a lot:

https://imgur.com/a/xjI3JBD

Wall st is foaming at the mouth to buy up more of these companies.

Summer is traditionally quieter since people are on vacation; still kinda holds true now. With S-1s out this week, you have more than enough time for the grunt work to be done before people are back in the office after Labor Day. I'm sure bankers have advised clients to get their ducks in a row because there's going to be a lot of supply and you really don't want to be the last out the door.

The market is the highest it’s ever been. A lot of unicorns have waited for years to IPO and it there’s never been a better time to do it.

Likely because it's the end of the second quarter and they all have high numbers because of Coronavirus and such. For some companies their Q3 ends inside of just after November.

And we all know what happens in the U.S. in November every four years. So there's going to be great concern about the market dipping or taking a dive.

see above for a very good answer

I'll give my answer

Fed is printing a lot of 'money' with its printing press

some of it is going to large tech because it is 'safe' and still 'growing'

However, there is $3 trillion of money printed, and even more being printed

So, where does this money get put?

Where can it get A RETURN?

Tesla is one answer. That's why Tesla is 1,000 P/E

Another answer is technology companies

Let's say there is Family X, friends of Fed and its printing press

Fed has printed $50 billion for them

Where can they put this $50 billion, so that it doesn't get killed?

A) Big Tech

B) tech that might become big Tech (like Tesla)

C) new tech IPOs

So any tech company that can IPO, should IPO

All this LIQUIDITY/Free Money/Printing Press Money is desperate to find ANY KIND OF RETURN

Also, they have so much money and no where to put it, their thinking is

17 different SaaS companies - at least 1 or 2 will become trillion dollar companies in 15 years

Invest in all 17

They literally 'printed' the money so it costs them nothing

because the tech market is as frothy if not more so that 1999?

last chance to exit scam before the bubble pops

I totally get the feeling behind this, but you can't blame market participants for taking actions that are rational, regardless if the overall market fundamentals are/seem to be irrational.

If the market is desperate for returns, and tech equities are one of the few remaining avenues for such returns, and you are the owner of those equities, what else would you expect to occur? "No no no, don't buy these valuable shares of my company, invest elsewhere!" No way, you're going to cash out as fast as possible before your gains evaporate when the market transitions.

Most undesirable actions by the powerful have a rational character. It's bizzare to me that this is so commonly used as a defense. It says to me that the problems are seen to be individuals, not systems of power.

Note: I'm not commenting on the specific case here, just this argument in general.

It is indeed a race to the finish before the whole thing crashes down soon.

Maybe as soon as they heard Airbnb and Palantir planned for their IPOs, everyone started to run for the hills for their own IPO filings before the whole thing falls over soon.

Reminds me of the dotcom era. Now this is the time again.

Investors will decide. Supply and demand.

Maybe so, but please don't post unsubstantive comments to Hacker News.

Reply on news.ycombinator.com