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My buddy works for a law firm and was telling me that they often represent technology companies when they IPO. It turns out there’s an intense amount of researc
by kaycebasques 8y ago
My buddy works for a law firm and was telling me that they often represent technology companies when they IPO. It turns out there’s an intense amount of research that goes into the S-1 process. The law firm makes a huge spreadsheet, with each row representing a sentence from the S-1, along with evidence supporting the truth of that sentence. They do this because, if the price goes down after the IPO, there’s inevitably a lawsuit, and the company needs to justify everything it said in the IPO.
- toomuchtodo 8y agoCould be a fun startup idea: NLP for securities legal action against IPOs for investors.
- jjeaff 8y agoGood luck getting VCs to fund something that fights against their primary source of return.
- deleted 8y ago[deleted]
- toomuchtodo 8y agoSome bootstrapping required.
- rongenre 8y agoIt'll have to be a lifestyle business /s
- Bombthecat 8y agoEnd result : block cloud chain, maybe future, or not! Get in now! Or not, maybe...
- village-idiot 8y agoUhh, uhh, trustless! Distributed!
- lazyjones 8y agoIf lawsuits are such a huge issue, why don't companies limit their IPO to, say, 1% at very low valuations and then follow with a larger ATM offering when stock prices reach a better level to get more cash? Because the banks don't let them?
- Someone 8y agoWho would get to buy that 1%? If there’s any chance of that even remotely looking like “friends of the company owners” or “friends of the banks selling the stock”, people will sue. Even if you make it a lottery, you will have to make sure everybody who would want to buy at the low price gets equal opportunity to do so. Finally, I would think the tax department could see selling at a price that you know is significantly below market value as a gift that is taxable.
- aeternus 8y agoI'm not sure why more companies don't choose to go the direct listing route (like Spotify). Set a reference price, but allow the employees and market decide. Tech companies especially have enough employees that own shares and want to sell that liquidity should not be a big issue. This allows the price to be tested while slowly adding volume (as price stabilizes, more employees willing to sell).