JonFish85

The footnote kind of explains this:

"Net loss for the nine months ended September 30, 2017 includes $2.5 billion of stock-based compensation expense, primarily due to the recognition of expense related to RSUs with a performance condition satisfied on the effectiveness of the registration statement for our initial public offering."

I believe the vast majority of that was due to issuing stock to Evan Spiegel for successfully executing the IPO at given metrics.

Speaking only anecdotally, friends who complain the most about college loans are the ones who took out massive (~$100k) loans to go to private schools. With some exceptions, private schools are likely not to be worth the extra money; problem is, loans are due later, but awesome "dream school" is now.

If the only thing standing in the way of a student continuing on Graduate or PhD studies is grant money, they shouldn't have trouble finding a job. In that case, if the university wants to attract those students from the private sector, they'll have to find a way to increase a student's stipend to cover these expenses. At top-tier schools where tuition is the highest, their endowment is likely large enough to support this move.

Alternatively, the schools could adjust what they charge students for tuition. As the article states, the cost of a year at Princeton's grad school is $49k/yr. Somehow I suspect that this sticker price is not tied to much in terms of their cost, but if it means charging less to students if that allows them to attract top talent, they could probably do that as well.

In terms of raising the bar, to me this would mean that if graduate schools want top talent, they'll have to find a way to do it: raise the stipend, lower the cost of tuition or something else. In this case, a very bright student who can't afford graduate school will either have to go into industry or the schools will have to find a way to keep them.

On the downside, if we follow the pattern of the last 30 years, the reaction will go something like:

1) Students struggle to afford college tuition

2) Government steps in to make large cheap-ish loans available beyond what might be reasonable ().

3) Students now have access to loans to go to any school they want

4) Colleges notice that they can raise price because students don't price shop

5) Colleges raise their prices

() They're government backed loans that are difficult to discharge, mostly because there is nothing to repossess and interest rates would likely go through the roof if students could graduate and immediately discharge their loans.

No, it won't. The sensationalism all around is just infuriating; I know it's basically politics in a nutshell, but this sort of crap is getting really old. It's not going to destroy higher education; it might raise the bar a bit of who goes to graduate school, and force schools to do more to entice top tier talent to come to their school, but it's not going to destroy it.

Because there is so much more money in the “ordinary workers and students” subset of society than there is in the top 0.x%.

"I feel like the fury over it is very reactionary."

I think this is the current boogey-man to go after. I think it's a useful tool for politicians (DNC, Hillary Clinton, Democrats and Republicans - none of them wanted Trump where he is today) to bury their heads in the sand and say that it wasn't their fault that they got the election so wrong. They can point to Russia and ignore their own shortcomings that in my opinion put people off of voting for what they "should" have voted for. Given the choice of a deeper soul-searching or blaming someone else, humans usually choose to point the finger at someone else.

Did Russia/Russians attempt to influence the election? Absolutely. I'm sure most major powers in the world did, in one way or another. They'd be silly not to at least consider it, in the same way that I'm sure the United States attempts to serve its own interests via other countries' elections. But I don't think it's anywhere near as effective as politicians seem to want to make it appear.

Remember that the Chinese government doesn't have to deal with a lot of what the United States' government does have to: things like local governments and our election system. Our government is not set up to move quickly (by design!): our government can't decide to shut down thousands of businesses for a day without consequences, and for good reason.

Americans have set up their government so that it more or less reflects the will of the people, and the relatively educated American public is not OK with the government taking drastic steps very quickly. For better or for worse, the Chinese government can move extremely quickly because they essentially answer to no one; if the government wants to raze a neighborhood for something, they do it. If they want to build a road, they move whatever's in the way and build it. In some ways it's incredibly efficient. But that's something the US government is not optimized for, and I'm personally glad for that.

Alternatively: the bubble is inflated with wealthy oil sheiks’ money, and transferred to upper middle class workers.

Edit: a word

> "What causes the common stock to "evaporate" exactly? Is this a side effect or is this intentional?"

This would mean something like paying exactly what the valuation at the last round was, such that it'd cause the cap table to unwind leaving precisely $0 to split amongst common stock. It's not a huge win for investors, but if it's clearly not going to be a huge win, they get their money back (plus whatever conditions they had for more), and can move on.

> "For an the average rank and file employee who has been grinding it out at Wepay through the ups and downs I am imagining this might not be a "feel good" moment."

Probably not. I've had friends who have been at companies that have sold at these "big numbers", but come to the sad realization that the numbers aren't "real" (e.g. their 1.5% stake of $250m is worth $0). I'm sure it's a weird feeling to see the "congrats!" messages! However, the "retention bonus" of $100k over 4 years on top of their salary is usually enough to keep people from burning the place down (being facetious).

If "the number" is, say $220m, it could be a number of things. If it's cash today, others have done the math on how things could get divvied up.

The "top line" number can mean a lot of things though; it almost certainly includes the assumption of hitting several targets, some of which are reasonable and some are probably stretches. It's also a very real possibility that the "real" cost that Chase paid was just the right amount to make the common stock evaporate; investors get their money back such that $0 is split amongst common stock. Employees then are given a sheet to sign saying that their stock in WePay is now worth $0, but here's an offer for Chase stock vesting over 4 years.

Anecdata, for sure, but most of the deals I've seen have been something like this. The top-line number is all well & good, but the real dollars people extract from it are invariably less (again, just in the limited set of things I've seen). I'm sure there are exceptions (I bet the Instagram folks did just fine). But if I had to make a guess, it'd be that the founders will come out with a good chunk of cash, and employees will get a job at Chase out of it (with the valued employees getting a nice bonus at the "new car money" level)

The short answer is probably that if Twitter were to ban Trump, they'd face an enormous backlash from folks who take it as suppression of political opinions. It's a blessing and a curse for twitter, I'm sure -- having Trump tweet regularly has probably been a boon for business, overall. If you're generous, you could make the argument that Twitter is allowing the President to bypass the traditional media outlets and have his voice heard directly (for better or worse).

> Surely threatening nuclear war violates their "Abusive Behavior" rules.

Even if you were to try to live by the letter of the law, you'd have a hard time really getting this to stick, I imagine. If this is the tweet you're referring to:

"Just heard Foreign Minister of North Korea speak at U.N. If he echoes thoughts of Little Rocket Man, they won't be around much longer!"

Then I think you'd have a hard time construing this as "terrorism", any moreso than half of Twitter's population has said (sports teams getting "killed", public figures "not being around anymore" (i.e. probably meaning "in office")).

$1.5m, and seemingly a team of somewhere between 18 and 27 people, they're going to need more funding. If they're paying $5k/person/mo (assume for now this includes things like taxes and overhead), that's one year's worth of money. On top of this, they have to cover things like FCC certifications, fees for getting manufacturing rolling and all the other fun stuff that comes with shipping physical product.

"Trump cited 100% - labor force participation rate as a measure of unemployment, which is complete nonsense because it counts people who are full-time students or who are disabled as unemployed."

Perhaps the point here is that what is "true" and what is "false" aren't entirely black or white. Depending on how you look at it, full-time students aren't employed; they are therefore unemployed. In some contexts, people who currently do not hold a job are an accurate representation of unemployed. And therein lies the rub: context is incredibly important.

Well, for starters, there's the image part of it: the higher the top-line number, the more prestige comes with that.

Then there's the potential that the founder has taken money off the table (giving up on-paper money for cash), so even if the deal isn't quite as nice as it could be, they still own a significant portion of a "successful" company.

Also, the higher the top-line valuation, the more free marketing you get (the headlines read the same, just with a bigger number in it). This can translate into an easier time of hiring, and the ability to hand out smaller and smaller slices of equity for that top talent (employees generally will never see the term sheets to understand that even their 0.01% of the company is likely to be worth very little).

Obviously some founders will optimize for the former (lower valuation for better terms); others will be more interested in ratcheting up that top-line number to attract future investors, high-value employees, book deals, press, etc. That's ultimately the founder's prerogative.

Isn't Medium struggling in its own ways, cutting costs & laying people off? If it was a Twitter product, I imagine the stockholders would want it shut down, seeing it as a distraction to the main Twitter product.

"If you can save $10 by paying $5, and your argument for why you won't do it is that it costs too much, I'm going to tell you that you need a math course."

It's not simple math though, it's politics and projections from people with an agenda. If you tell me I can save $10 by paying $5, it's my responsibility to decide if you're lying to me, to question your assumptions, etc. Maybe it costs $8 to save $10, but I give up significant other rights/options/etc.

TLDR, it's not just math, and the math isn't that simple.

In a word, the answer is still "cost". You can try to dance around it and talk about how " A single-payer program would inevitably incur additional taxes, but the overall health care costs would be lower for most people and businesses", but at the end of the day, it's going to cost a lot of money. This article claims it'd "only" cost about an additional $100b or so in CA; I think critics would be very skeptical of that, especially since costs are claimed to come from "reduced overhead" areas. I'm not sure that governments have a history of keeping costs low, so voters would likely be skeptical of that.

Ultimately I imagine it boils down to voters in a state with already very high taxes (by American standards) being very wary of voting to significantly increasing their taxes again.

Or set up the stock plan in such a way that you're untouchable (e.g. Snapchat's Evan Spiegel).

And to add to this, it's impossible to predict the future. Even if you are privy to all relevant details to come up with an accurate "value" to attach to your shares, you have no idea what sort of deals will be made in the future (stock-backed loans or later equity rounds come to mind). All it takes is one bad-for-common deal and you're wiped out, and common is usually the first to get the short end of the stick (and the last to find out).

"Startup companies take a long time to build so that 10% will make it tough to hire and build a team over 7 years because there is only so much equity to go around."

Is it still generally the case that the entirety of the options pool for employees is well under 10% (more like 5%)? If that's the case, I get that it may be limiting for the investors, but hiring & building a team is pretty "cheap" from an options standpoint I believe.

"a fiduciary duty to non-employee shareholders"

I believe this is fairly difficult to prove in court. It happens pretty commonly; it's not super hard to dilute someone out if the company wants to. In fact, it's probably seen as a good move by the board and all current employees.

"Their new profitability gives me some measure of confidence"

"Profitability" can mean whatever you want it to mean at a given moment. In this particular case it's closer than a lot of measures, but it's still a non-GAAP profit. In general these sort of startup announcements are marketing materials.

Every company I've been at has declared themselves "profitable" -- the devil is in the details of what you choose to ignore.

If generally an employee stock option pool is ~5% of the company, then why is it worth spending time optimizing for that by firing people before stock vests? I suppose it'd be possible that management/investors view the employee ownership as getting out of hand, but even if the options pool is 10-15% (which I think would be fairly ridiculously large), it's likely mostly held by early employees who may have already vested.

It just seems like a silly thing to spend time doing, monitoring who will be vesting soon to fire them. Sure, maybe for one or two executives who are vesting integer percents of stock, but beyond that, it's not worth the time, and definitely not worth the backlash.

"California is almost certainly going to break off from the larger United States in our lifetime."

What?! That won't happen.

Unprecedented? It happened with George W. Bush not long ago...

If everyone gets 2x shares/options, there's no change in ownership -- someone lost out, otherwise they wouldn't do it. And preferred shares are tickets for the front of the line, and quite possibly with onerous terms that aren't public (whether it's a multiplier, or something else). Between a lowered valuation and more shares given to investors and the burden of a high valuation..... things don't look bright for the future of Zenefits, and especially not their employees.

> golden hand cuffs

Those aren't really worth much anymore -- once you hit a bump in the road, employee options are the first things to be wiped out. If investors received a larger share as has been reported, it's in preferred shares, which probably wipes out the employee options.

And insurance premiums, and ADA-compliant housing...

> "eroding everything we believe in."

> "the Muslim ban"

This sort of exaggeration probably doesn't help anyone.

>> Uber only uses subsidies when trying to break into new markets to expand. If they stopped expanding, they would become profitable rather quickly.

Are you sure that's true? That sounds like the marketing speak that Travis K. spouts, but I wouldn't be surprised if that weren't the whole truth. Like any other "startup", you can claim to be profitable pretty easily -- you just have to find a hand-wavy way to qualify that ("if you exclude debt and operating expenses we're net margin profitable!").