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I can only hope this leads to a backlash against high growth companies staying private for so long. Along with their jobs, I imagine many AirBnb employees have

I can only hope this leads to a backlash against high growth companies staying private for so long. Along with their jobs, I imagine many AirBnb employees have lost a majority of their (paper) net worth because they were not given the opportunity to sell and diversify.

duxup 6y ago
I think if any employees were relying on that paper wealth... that's the problem. IMO People need to understand what that really is (usually not much) rather than blame the company.
- freewilly1040 6y ago
  The point is that in this case there was real wealth that could have been released had they done an IPO
  - duxup 6y ago
    If not for COVID-19? When should they have IPOed?
- mdamore 6y ago
  We're talking about a decade-old company with billions in revenue. If your job at AirBnb was your first chance to build any wealth, you never had the option to diversify. I don't think it's fair in that case to blame the employee. I don't necessarily blame the management either. I do hope this reminds employees of private companies that their equity is only on paper until they are able to sell, and they should pressure management to give them the option.
  - thatsenough 6y ago
    Or, don’t get lured in by a company offering you huge compensation that you can’t actually touch (without realizing it’s a gamble). To be fair, even the cash compensation at Airbnb was supposedly pretty high. But I’m not sure whether that’s much consolation now, after they’ve been dangling a golden carrot in front of employees for years.
    - duxup 6y ago
      Yeah that's kinda what I was getting at. Education about what the value of something you can't sell seems a better route. And granted, at Airbnb, maybe they all knew.
dehrmann 6y ago
The only way this is related to IPO timing is that more people are affected. If this happened to a $200M company planning to IPO, the paper losses are still pretty bad. The main criticism of delaying IPOs is that by the time they hit the public market, all the growth is gone. Markets learned this after Lyft and Uber, and Wework got punished for it. While there can be more corporate shenanigans in a private company, I also buy the justification for staying private that private companies can focus on longer-term thinking without quarter-to-quarter market expectations.

duxup 6y ago

I think if any employees were relying on that paper wealth... that's the problem. IMO People need to understand what that really is (usually not much) rather than blame the company.

freewilly1040 6y ago
The point is that in this case there was real wealth that could have been released had they done an IPO
- duxup 6y ago
  If not for COVID-19? When should they have IPOed?
mdamore 6y ago
We're talking about a decade-old company with billions in revenue. If your job at AirBnb was your first chance to build any wealth, you never had the option to diversify. I don't think it's fair in that case to blame the employee. I don't necessarily blame the management either. I do hope this reminds employees of private companies that their equity is only on paper until they are able to sell, and they should pressure management to give them the option.
- thatsenough 6y ago
  Or, don’t get lured in by a company offering you huge compensation that you can’t actually touch (without realizing it’s a gamble). To be fair, even the cash compensation at Airbnb was supposedly pretty high. But I’m not sure whether that’s much consolation now, after they’ve been dangling a golden carrot in front of employees for years.
  - duxup 6y ago
    Yeah that's kinda what I was getting at. Education about what the value of something you can't sell seems a better route. And granted, at Airbnb, maybe they all knew.

dehrmann 6y ago

The only way this is related to IPO timing is that more people are affected. If this happened to a $200M company planning to IPO, the paper losses are still pretty bad. The main criticism of delaying IPOs is that by the time they hit the public market, all the growth is gone. Markets learned this after Lyft and Uber, and Wework got punished for it. While there can be more corporate shenanigans in a private company, I also buy the justification for staying private that private companies can focus on longer-term thinking without quarter-to-quarter market expectations.