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Yes it's probably going to round trip back to $300B given AirBNB and DoorDash have taken their hits as of late. That said - I do think since the lock-up period
by somethoughts 4y ago
Yes it's probably going to round trip back to $300B given AirBNB and DoorDash have taken their hits as of late. That said - I do think since the lock-up periods have probably expired on the big ones - the pre-IPO investors like YC/founders/VC probably made it out just fine already.
It's really a message to those of us retail investors buying the IPO or post IPO shares of YC companies that need to be aware of the track record w.r.t. an investment. Most of the gains have been extracted already and future post IPO growth has already been priced in.
It also does suggests that YC was perhaps a beneficiary of easy monetary conditions that lifted valuation.
- deleted 4y ago[deleted]
- whiplash451 4y agoWhy would this be specific to YC IPOs vs other IPOs?
- somethoughts 4y agoI agree - It isn't specific to YC IPOs - it applies to all IPOs. I think the point is that YC perhaps is a good early stage VC in maximizing the IPO price for the benefit of LPs and founders and unloading at the right time onto the market. Perhaps its less clear given the current state of things whether their companies are good for long term earnings performance for long term ownership by retail investors.
- dntrkv 4y agoIt's not just IPOs, the whole market is experiencing a correction. We're way overdue for one anyway.
- somethoughts 4y agoIts relative - high PE, high growth multiple stocks (such as YC IPOs) have generally been reverting to mean. Most stocks that were already at the mean w.r.t. PE are still sticking to the mean with flat earnings. What needed correcting is getting corrected. What was correct is staying correct. The rise in interest rates means that companies that have been producing their own cash can fund growth initiatives internally. Companies who were funding growth initiatives using outside capital (debt, VC investment) are now going to be paying 10%+ to do so.
- gsibble 4y agoIndeed. The market cap of YC backed companies has tanked in the last few months, even days.
- pc86 4y agoI search for it but can't find it, but I do recall reading an article that if you put the same amount of money into every tech stock at IPO, you actually beat the market by a hefty bit. It was probably a year ago so who knows if that's held as I think tech has been particularly hard hit by the latest correction, but who knows.