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Perhaps they had some insight that it wasn't going to be that strong? Public markets are very unforgiving if you have a few bad quarters. That 3.7B IPO could
by mathattack 10y ago
Perhaps they had some insight that it wasn't going to be that strong? Public markets are very unforgiving if you have a few bad quarters. That 3.7B IPO could wind up a 2B company after a few of those. CISCO stock won't get crushed by a couple bad quarters from AppDynamics.
- nemo44x 10y agoThey've been increasing the initial offer price the last week as demand was high. From $10 to $14 a share. That's a positive sign for them. To then get bought out at 100% premium from that is massively prosperous exit. Consider their last private valuation was 1.9 billion it sounds like the investors, founders and employees all have reason to celebrate tonight. Congrats to them all for this very fortunate exit.
- sulam 10y agoFWIW I was prepared to short the heck out of this stock at that valuation, so perhaps it's good for them to get the liquidity now vs after a few quarters in a rough market.
- mathattack 10y agoInteresting. You clearly have more insight than me on this. One thought on the premium to the final round... Late growth investors are still looking for 3X returns (Versus say 10X from early investors) and the earlier investments carry a liquidity discount. 2X is still very good, but it's not the return that will carry the losers in the fund. And yes - they should all celebrate. As should the rest of us! Every unicorn that exits reduces the backlog, and provides more liquidity for the rest of us.
- atishd 10y agobelieve the investors (who had a contractual right to purchase additional shares in ipo) exercised that right, so there was actually expectation of good public market performance. nothing beats a sure thing though... M&A valuation avoids having everyone watching the stock price daily