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What went wrong with the Apigee IPO for the employees? I know that they got acquired by Google but I'm not familiar with anything else.

by ultimoo 10y ago

econner 10y ago
Quick research suggests this timeline to me: Summer 2014 Apigee raises last private funding at a $600M valuation April 2015 Apigee IPOs at a valuation of $500M By end of 2015 Apigee closes at a valuation of ~$250M. So the company lost almost 2/3rds of its value probably right as the lockup period was expiring for employees to sell shares.
- charlesdm 10y ago
  Another option is that the value dropped because of the lockup period expiring?
- myhrvold 10y ago
  Well, yes, but the acquisition in Sep 2016 (referenced in another reply to this comment) was just over the IPO price: https://techcrunch.com/2016/09/08/google-will-acquire-apigee-for-625-million/ https://techcrunch.com/2016/09/08/google-will-acquire-apigee... Facebook had a similar valuation decline, then a bounce back. So those who had faith in the company for another year saw modest gains compared to 1.5 yrs ago at IPO.
- bogomipz 10y ago
  Ouch. What is the justification for the lock up period? Is the idea that employees are somehow going to flood the market? Is the volume of vested options for the average worker bee really that high at the time of IPOs? Its seems like the plebes get burned a fair amount.
  - econner 10y ago
    Yea, it's to keep the price somewhat stable after the IPO. It's a very standard thing to do and the share price of a company usually drops permanently when the lock up period expires. Maybe a good rule of thumb is 10-20% of the company could be owned by employees at the time of IPO which could materially change the share price.
hkmurakami 10y ago
It looks like the acquisition price per share ($17.40) was right around their IPO price of $17, so options wouldn't be underwater. But before that the stock traded as low as $6. So during this time the employees' stock was underwater, whereas C level will have been able to sell a portion of their shares at IPO (vs employees waiting for their 6 month lockup to expire). But the stock had recovered to $16+ before the acquisition so... I mean it's a public company. "Up and to the right" isn't always the case

What went wrong with the Apigee IPO for the employees? I know that they got acquired by Google but I'm not familiar with anything else.

by ultimoo 10y ago

What went wrong with the Apigee IPO for the employees? I know that they got acquired by Google but I'm not familiar with anything else.

econner 10y ago

Quick research suggests this timeline to me: Summer 2014 Apigee raises last private funding at a $600M valuation April 2015 Apigee IPOs at a valuation of $500M By end of 2015 Apigee closes at a valuation of ~$250M. So the company lost almost 2/3rds of its value probably right as the lockup period was expiring for employees to sell shares.

charlesdm 10y ago
Another option is that the value dropped because of the lockup period expiring?
myhrvold 10y ago
Well, yes, but the acquisition in Sep 2016 (referenced in another reply to this comment) was just over the IPO price: https://techcrunch.com/2016/09/08/google-will-acquire-apigee-for-625-million/ https://techcrunch.com/2016/09/08/google-will-acquire-apigee... Facebook had a similar valuation decline, then a bounce back. So those who had faith in the company for another year saw modest gains compared to 1.5 yrs ago at IPO.
bogomipz 10y ago
Ouch. What is the justification for the lock up period? Is the idea that employees are somehow going to flood the market? Is the volume of vested options for the average worker bee really that high at the time of IPOs? Its seems like the plebes get burned a fair amount.
- econner 10y ago
  Yea, it's to keep the price somewhat stable after the IPO. It's a very standard thing to do and the share price of a company usually drops permanently when the lock up period expires. Maybe a good rule of thumb is 10-20% of the company could be owned by employees at the time of IPO which could materially change the share price.

hkmurakami 10y ago

It looks like the acquisition price per share ($17.40) was right around their IPO price of $17, so options wouldn't be underwater. But before that the stock traded as low as $6. So during this time the employees' stock was underwater, whereas C level will have been able to sell a portion of their shares at IPO (vs employees waiting for their 6 month lockup to expire). But the stock had recovered to $16+ before the acquisition so... I mean it's a public company. "Up and to the right" isn't always the case