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> What you're saying might be true if this were a perfect market, but there's externalities in that market (like liquidity) which you're not considering. It is

> What you're saying might be true if this were a perfect market, but there's externalities in that market (like liquidity) which you're not considering. It is absurd to claim that liquidity in Uber shares would result in a 30% discount. A far better explanation is that preferred has rights that add most of that value. > Fiction as it may be, it's the best instrument the public has to work out the value of a private company. It's consistently wrong and in the same direction. As such, it's absurd to pretend that it shouldn't be discounted. It's fun for PR and headlines, but that's it. The real summary here is that you, for whatever reason, are looking at a market transaction and claiming it's not the real market price. That's not just stupid, it's ludicrously arrogant of you. You are essentially claiming that you are smarter and better informed than the participants in a large financial transaction. The rest of us are simply arguing that maybe we should trust the market a bit more, and be a bit less arrogant than you.

simonrobb 9y ago
> It is absurd to claim that liquidity in Uber shares would result in a 30% discount. I'm not sure that it is (as aaavl2821 has commented down the thread, "The liquidity discount that private equity investors use is typically 20-30%"), but more to the point this price is either accepted or rejected by Uber shareholders, not Uber's board. It's the shareholders who will decide if they will take that discount for the sake of liquidity, not some mystical market force you're alluding to. Given many of them are employees who may well just want to get their returns and buy a family home, I think we'll see a lot of them taking the offer up. They're just offloading their risk, and gaining liquidity. > A far better explanation is that preferred has rights that add most of that value. I did in fact note that in my original comment. But this only explains why SoftBank is willing to pay different prices for two different classes of shares. It doesn't mean Uber is suddenly worth $21B less because SoftBank was able to strike the deal, which is what I'm arguing against. > You are essentially claiming that you are smarter and better informed than the participants in a large financial transaction No, I'm not. I'm claiming that something a media outlet published is a distortion of the deal. They were not participating in the transaction. We'll have a better discussion if you can leave the ad hominems out in the future.

simonrobb 9y ago

> It is absurd to claim that liquidity in Uber shares would result in a 30% discount. I'm not sure that it is (as aaavl2821 has commented down the thread, "The liquidity discount that private equity investors use is typically 20-30%"), but more to the point this price is either accepted or rejected by Uber shareholders, not Uber's board. It's the shareholders who will decide if they will take that discount for the sake of liquidity, not some mystical market force you're alluding to. Given many of them are employees who may well just want to get their returns and buy a family home, I think we'll see a lot of them taking the offer up. They're just offloading their risk, and gaining liquidity. > A far better explanation is that preferred has rights that add most of that value. I did in fact note that in my original comment. But this only explains why SoftBank is willing to pay different prices for two different classes of shares. It doesn't mean Uber is suddenly worth $21B less because SoftBank was able to strike the deal, which is what I'm arguing against. > You are essentially claiming that you are smarter and better informed than the participants in a large financial transaction No, I'm not. I'm claiming that something a media outlet published is a distortion of the deal. They were not participating in the transaction. We'll have a better discussion if you can leave the ad hominems out in the future.