Hacker News Reader

marc__1on SoftBank-backed Greensill Capital is on the brink. 50k jobs could be at risk

> I'd fathom that at least half the time it's insiders dumping garbage on the public

What is the data you have to back this?

Goldman Sachs analyzed 4,481 U.S. IPOs over the past 25 years and this is one of their conclusions:

"Since 2010, IPOs with annual sales growth greater than 20% have been more likely to outperform Russell 3000 over three years than a comparable, slower-growing IPO"

Jay Ritter, professor at University of Florida, has a great table [1] that shows that companies with $100m in ARR who IPOed from 1980-2018 (n=3,299) have an average of 40.8% in returns on a buy and hold strategy 3 years after IPO, compared to 0.8% from the market.

More data here:

[0] https://www.barrons.com/articles/money-losing-ipo-stocks-can...

[1] https://site.warrington.ufl.edu/ritter/files/IPO-Statistics....

https://www.goldmansachs.com/insights/pages/top-of-mind/the-...

https://site.warrington.ufl.edu/ritter/files/2015/06/Why-Has...

marc__1on Launch HN: Alinea (YC W21) – Invest in stocks you believe in

> we are seeing that retail investors aren't doing any research at all

I don't necessarily agree. From Robinhood's most owned stocks by 02/25/21[0], you can 'maybe' argue that 2 out of them are 'meme' stocks. This is either an indications that investors know what they own or they follow the crowds (AAPL, AMZN, DIS, etc). It is easy to make conclusions based on media articles, but overall Robinhood investor is definitely not a meme investors

1. Apple 2. Tesla 3. AMC 4. Sundial Growers 5. Ford 6. General Electric 7. NIO 8. Microsoft 9. Walt Disney 10. Amazon

[0] https://www.nasdaq.com/articles/the-top-50-robinhood-stocks-...

marc__1on SoftBank-backed Greensill Capital is on the brink. 50k jobs could be at risk

There is a lot of data out there given they are publicly traded, although I don't like their presentations: [0]

13 IPOs for Vision Funds I and II

Fair Value of both funds: $116.7b

Investment Gains: $27.6b

Dry Powder: $19.5b

Distribution to LPs: $15.2b

'SoftBank backed does amazing things' is always relative especially because the failures are much more media-friendly.

Case in point: There are only 7 posts on Guardant Health on HN. What they are doing in liquid biopsy for cancer treatment is remarkable, and yet we never comment on that.

[0] https://group.softbank/system/files/pdf/ir/presentations/202...

marc__1on Okta to Acquire Auth0 for $6.5B

Bezos apparently said one that "Your margin is my opportunity".

If this merger increases future profitability of new Okta, then you can argue there is a newer genuine market opportunity in authentication.

The VC-backed industry is all about creating new opportunities (and by definition disrupting someone else's business), and recirculating investment money, improving our economy

marc__1on Okta to Acquire Auth0 for $6.5B

More information on the ppt

Auth0

200M ARR

50% Growth

120%+ Net Retention Rate

https://investor.okta.com/static-files/83f1811e-2f92-4c08-a1...

What a great acquisition. Congrats to both teams!

marc__1on Berkshire Hathaway 2020 Annual report [pdf]

The major difference is the risk profile of the decisions (although the time horizon might ultimately be the same): both Amazon and Apple were more mature (and significantly older, larger orgs, brand awareness, etc) running B2B and B2C businesses, while Snowflake is less than 10 years old and not well known outside some circles

marc__1on Berkshire Hathaway 2020 Annual report [pdf]

They were notoriously for buying $10.7b worth of IBM shares in 2011 and selling in 2018 for a loss north of 30% [0]. In retrospect it was an obvious mistake, but these investment decisions always are.

SNOW is unique in their portfolio because it is the only investment in tech. What comes to mind is:

-how and who made the investment decision (does Buffett knows how valuable Snowflake is for tech?);

- will they start investing in later-stage pre-ipo companies (Stone Payments is a Brazilian fintech that is akin to Snowflake in the timing and size of committment)?

[0] https://www.cnbc.com/2018/05/04/warren-buffett-says-berkshir...

marc__1on Berkshire Hathaway 2020 Annual report [pdf]

Interesting that there are no comments on the 750m investment in Snowflake made last year, which is now valued at 1.7b

https://whalewisdom.com/filer/berkshire-hathaway-inc#tabhold...

marc__1on How GoodRx Profits from Our Broken Pharmacy Pricing System (2020)

I think their CEO is answering this question just like Stewart Butterfield had to answer why Slack and MS Teams are not really competitors

Some articles and interviews for "rabbit holers"

[1] https://www.barrons.com/amp/articles/why-goodrx-ceo-isnt-wor...

[2]https://investors.goodrx.com/events/event-details/jp-morgan-...

marc__1on Starlink is now Accepting General Pre-orders

Maybe naive question, but what are the tech and/or economical hurdles that impede 'edge' nodes to become satellites now that Starlink is approaching a large scale?

marc__1on Visualization of 40M Cell Towers

The potential user base is massive once you move away from the urban centers in the developed world.

Take a look at Lagos, Nigeria. Population is ~15m for ~80k towers. Only 1.4k (1.7%) of them are 4G LTE with the remaining either 3G or CDMA.

Or the State of Sao Paulo, in Brazil (home of 22% of Brazil's population and 33% of the country's GDP). Approximately 573k towers, 76k of which are 4G

For comparison, the greater Boston area has ~107k towers and 58k are 4G.

marc__1on Harvard cracks DNA storage, crams 700 terabytes of data into a single gram (2012)

this is a 2012 post and a whole lot of science has been developed since. See more with Microsoft [1], NCSU [2], Stanford [3] and others

[1] https://www.microsoft.com/en-us/research/project/dna-storage... [2] https://www.cbe.ncsu.edu/blog/2020/11/08/a-new-approach-to-d... [3] https://searchworks.stanford.edu/view/13595440

marc__1on Using artificial intelligence to find new uses for existing medications

The model yielded nine drugs considered likely to provide those therapeutic benefits, three of which are currently in use – meaning the analysis identified six candidates for drug repurposing

Quite interesting! Was wondering if/how this novel approach could be translated into a business. Maybe it earns referral $ if the drug candidate can be successfully repurposed and also does it mean that the IP is protected for another 20 years?

marc__1on Roblox Switches to Direct Listing from IPO with Investment

because there is no secondary market for the shares then Roblox received the 'optimal' investment

marc__1on Microsoft Acquires Smash.gg

or the team

here is the series A announcement from 2017, with some interesting VCs participating

https://blog.smash.gg/growing-our-team-at-smash-gg-912f1caaa...

marc__1on Wish S-1

IPOs priced per year

2017: 160

2018: 192

2019: 160

2020: 190 (YTD)

IPO proceeds year-to-date is $67.6b, the largest amount of the decade if you discount Alibaba's $25b IPO in 2014

[1]https://www.renaissancecapital.com/IPO-Center

marc__1on Roblox S-1

Unfortunately they can't

All of the companies traded on the Nasdaq have four-lettered ticker symbols, which are representative of the actual company. For example, the ticker symbol for Nasdaq-traded Microsoft is MSFT. However, in some cases, a ticker symbol on the Nasdaq will have five letters, and the fifth letter is an identifier symbol that tells market participants something about the company

https://www.investopedia.com/ask/answers/06/nasdaqfifthlette...

marc__1on Tesla set to join S&P 500

> Tesla loses money on car sales

According to Tesla latest results, automotive gross margins were 27.7%, significantly above industry average.

> managed to squeeze out some positive earnings by selling regulatory credits

Of $7,611 million in quarterly revenues, $397m are regulatory credits.

Additionally, one of S&Ps criteria to include a company in the S&P is 4th consecutive quarters of GAAP profits, so I believe that the S&P agrees that Tesla does generate real profits

[1] https://tesla-cdn.thron.com/static/4E7BR9_TSLA_Q3_2020_Updat...

marc__1on Tesla set to join S&P 500

Roughly speaking, the price per share of a company is a reflection of the expectations of the market about the future cash flows a company generates.

The market is simply telling us that it expects Tesla to generate more cash flow (very different than accounting profit) than of GM.

If you believe otherwise you see something the market doesn't and therefore can profit handsomely

EDIT: wording

marc__1on Tesla set to join S&P 500

Tesla Inc. (NASD:TSLA) will be added to the S&P 500 effective prior to the open of trading on Monday, December 21 to coincide with the December quarterly rebalance

Due to the large size of the addition, S&P Dow Jones Indices is seeking feedback through a consultation to the investment community to determine if T esla should be added all at once on the rebalance effective date or in two separate tranches ending on the rebalance effective date

marc__1on Airbnb S-1

Roadshows must start 15 days after the listing. After that the company will start with their roadshow with institutional investors to gauge interest (~20 more days).

Once demand and supply of the shares is established, they can announce a public price for the share on the date before the IPO.

My initial guess is that we can expect pricing of the IPO on the week of 12/14

marc__1on How Apple Is Organized for Innovation

Interesting article.

Would be curious if anyone inside (or ex-apple) can confirm if the article does accurately describe the overall organizational structure and leadership style

marc__1on Tesla Earning Result 3Q 2020 [pdf]

Cash flow: $2,4b for a 7.6b in revenue was outstanding

Rule of 40 of 318 is outstanding and only Zoom has a greater number than Tesla (42% YoY rev + 276% in Free Cash Flow YoY

marc__1on The CIA helped sell a mapping startup to Google (2015)

If you want to read from an insider's perspective, read this book from a Keyhole PM (I just finished).

Very interesting to see how Keyhole struggled with cash flow needs and long sales cycles in the post-dot.com bubble just as the average startup struggles now.

Also, In-Q-Tel was just an investor at the company, and many were wary about why Google (who didn't have any mapping product) would go that route.

https://www.goodreads.com/book/show/35820393-never-lost-agai...

marc__1on Real-Life Angel Investing Returns 2012–2016

> It’s a bit hard to give one number for the returns as if they are factual. The reality is these investments are illiquid and it’s hard to pinpoint the exact outcome

She should be using the standard way funds (and angels) observe non-liquid valuations on a quarterly basis [1]

Briefly speaking, if the company hasn't raised any new funds in the last 12 months from 'sophisticated investors' (in which case the valuation is given), she must have used a proxy valuation, like enterprise/sales comparable.

Anyways, interesting that over half of her portfolio is still active, but in line with the overall market [2]

[1] https://carta.com/blog/what-is-asc-820/

[2] https://www.sethlevine.com/archives/2014/08/venture-outcomes...

marc__1on We Tested Comma AI's OpenPilot

> Waymo and Tesla have some hope. Cruise and Zoox are burning VC money like crazy with little to show.

The numbers for Cruise reported by GM [1]:

As of six months Q22020, Cruise posted revenues of $53m and total expenses of $498m, compared to $50m in rev and $553m in expenses for the same six month period in 2019.

Total cash in hand for Cruise is $2.2b with zero debt

2 more years of cash burn is not your typical startup that is 'burning VC money like crazy', but still the cash burn is large.

Now the question is if Cruise can expect any revenue from the new DMV authorization in SF [2]

[1] starts page 9 https://media.gm.com/content/dam/Media/gmcom/investor/2020/j...

[2] https://www.dmv.ca.gov/portal/news-and-media/dmv-authorizes-...

marc__1on Why Twilio Acquired Segment

You can also argue that Twilio+The Trade Desk makes total sense:

Enterprises could have a single point of truth (Segment) and target existing and potential customers via sms (Twilio), email (SendGrid) and digital ads (The Trade Desk).

marc__1on Why Twilio Acquired Segment

In the current environment of everyone against 'big tech' it would be hard for Adobe or Salesforce to justify the acquisition of Segment from a competition standpoint, for they would consolidate the CRM market even further.

Acquiring companies that are adjacent to your core business makes total sense in adding value to your platform, and not acquiring core functionalities allows you to claim that competition is getting stronger.

marc__1on IBM is splitting itself into two public companies

Even if they 'spun off' businesses, they still have transfer pricing schemes among each and every subsidiary of Alphabet. This is just BAU for small and large organizations

[1] https://www.pwc.com/m1/en/blog/intangibles-tax-risks-opportu...

[2] https://prospect.org/economy/decisive-tax-defeat-for-the-mul...

marc__1on IBM is splitting itself into two public companies

As a shareholder you may require the business to guarantee that every deal negotiated with customers and suppliers are defined on an arm's length basis or face negligence or wrongdoing.

Every holding has transfer pricing [1] as BAU, and I can assume that it is also the case for IBM

[1] https://en.wikipedia.org/wiki/Transfer_pricing