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Stripe sets one-year timetable to decide on going public
- babl-yc 4y agoI assume this is in part due to the 10 year expiration of ISOs? Stripe was founded in 2010.
- indus 4y agoStripe reminds me Cisco systems in 1999. Cisco powered the Internet economy. Savvy CEO and team and amazing execution. Stock traded at $60 in 2001. Went down to $16 in just 2 years and still at $40 after 25 years. Stripe is equally relevant. It may not achieve the same private market valuation of $95B for some time. But we love the company, and will continue to use it as a partner, customer, and cheer leader.
- TimPC 4y agoIt’s honestly perplexing that so many tech companies have stayed private for such a long period of time. Especially in an era of rising interest rates and rising mortgage costs, people really want to be able to sell their stock. The difference between packages with equity you can sell and equity you can’t sell is gargantuan and there are massive benefits to having a public price that lets people fairly value that equity. Hoping to get fair value in a private market transaction is far from ideal and many employees will feel they are being forced to pay an unfair premium for liquidity.
- alephnerd 4y agoWhy go public when until 9-12 months ago you could raise IPO level cash ($100-300mil) in a Series D/E/F/G and with none of the SEC scrutiny. It's better for founders to remain private as long as possible. It's better for employees for companies to go public as soon as possible. For VCs it depends on what stage they are at in capital allocation (companies funded in the earlier stage of a fund will have more leeway cuz VCs don't need to pay back their investors, but companies funded at a later stage will be pushed to exit faster cuz you gotta make the investors whole) The Collision brothers and the Hindawis (Tanium founders) have both been very vocal about this point.
- Arainach 4y agoAfter the last 6 months (to say nothing of the last few centuries of capitalism) you still believe companies care about what employees want? Executives/Founders get loans against their illiquid but enormous equity, everyone else can go to hell as far as the decision makers are concerned.
- dzikimarian 4y agoWhat's perplexing for me is that, yesterday on HN I've seen crowd with pitchforks demanding CEOs of publicly traded companies to be laid off, along with the employees for giving up to the pressure of shareholders. Today I'm seeing ton of comments about how company has to go public, because otherwise employees (who have excellent compensation apart from stock) will have to wait a few months to liquidate their assets. Seems like certain altitude doesn't come with MBA title, like some want to believe :-)
- eagleinparadise 4y agoOof, there were a lot of secondaries done at some pretty ridiculous valuations, multiples of the valuation before it was just cut
- graderjs 4y agoAny likely consequences for Stripe’s customers if they become public?
- 1letterunixname 4y agoGoing public isn't a badge of honor: it's a last-ditch method to find external financing where private investors wouldn't bite.
- bbq 4y agoImportantly they said within a year they will go public OR do a private market transaction to make employees liquid
- Aqua_Geek 4y agoThat’s a LONG time (in total) for employees to wait for liquidity. Yes, they likely provided some opportunities for early employees to liquidate some of their holdings, but it’s got to suck to sit on that much funny money for so long.
- preinheimer 4y agoThey've had several options for employees to liquidate some of their holdings before now. They've generally only been open to current employees, but one a few years ago was also open to past employees.
- clintonb 4y agoThose offerings are only for options holders. RSUs cannot be traded; otherwise, every RSU holder has to pay taxes.
- a_t48 4y agoThis happened to me this year with another company. They opened up the ability to sell back RSUs, and a chunk of them got sold to pay for taxes.
- lbotos 4y agoI assume Stripe is giving out "Double Trigger RSUs" then? https://blog.pragmaticengineer.com/equity-for-software-engineers/#5-double-trigger-rsus https://blog.pragmaticengineer.com/equity-for-software-engin... Otherwise people are getting taxed now anyway if they are getting RSUs at a private Stripe, right?
- 4y ago
- mguerville 4y agoInteresting timing, wouldn't think it's optimal given macro conditions, but perhaps they don't want to wait however long it'll take to get back to the frothy markets
- shawnz 4y agoIt's because the earliest RSUs they issued are expiring this year: https://www.theinformation.com/articles/stripes-early-stock-awards-could-spur-ipo-plans https://www.theinformation.com/articles/stripes-early-stock-...
- Aqua_Geek 4y agoThey’re options that are set to expire, not RSUs. Yes, the employees could exercise them to prevent them from expiring, but then Uncle Sam comes to collect his dues. And that’s where illiquidity burns you.
- alasdair_ 4y agoThey are definitely RSUs.
- deleted 4y ago[deleted]
- chimeracoder 4y ago> They’re options that are set to expire, not RSUs. Both options and RSUs are required by law to have expiration dates. And it's plausible that either or both could have expiration dates within the next 12 months.
- kasey_junk 4y agoDouble trigger rsu’s in private companies also expire and holders of those have no option even to eat the taxes in that case. They just lose them.
- 4y ago
- TekMol 4y agoIt's interesting that there is so much technology and third party business involved in the process of moving value. - Visa has a market cap of $463B - Mastercard $362B - PayPal $90B - Block $48B Could it theoretically all be automated?
- nonethewiser 4y agoArent those the companies automating it?
- timerol 4y agoNo. (Channels patio11) As a society we have decided to delegate a bunch of responsibilities to the companies that move money. The most notable one is fraud protection. The companies that make this much money do so by pretending that a transfer of money is a clean, simple, and absolute thing. In reality it is messy, reversible, and fraud-prone. Being able to transfer $1B dollars as easily as you are able to transfer $1 would be a failure of the system, not a feature.
- rbliss 4y agoThat was a pretty good patio11!
- TekMol 4y agoI have been paying and being paid for decades now, and I have never involved a payment processor in a dispute I had with the other side. If arbitration is the reason these companies exists, it seems like bad deal. Maybe they sell an illusion?
- ericd 4y agoYou might be surprised how often those disputes are used (and abused), then.
- pchristensen 4y ago"I have never been owned by another person, so there is no need for a law against slavery." The world is full of services, valuable, difficult to provide services, that a given person will never consume. Doesn't mean no one else does.
- rvz 4y agoMaybe they should have IPO'd or directly listed in 2019 at the very peak when everyone else was rushing to the exit as I said before [0]. Of course this is also not in hindsight either. [1] Seems like they now don't want to wait anymore and just unload their shares into the market and especially onto retail investors. [0] https://news.ycombinator.com/item?id=32567217 https://news.ycombinator.com/item?id=32567217 [1] https://news.ycombinator.com/item?id=20993919 https://news.ycombinator.com/item?id=20993919
- fragmede 4y agohindsight is 20/20
- cschep 4y agoyou know what they say.. hindsight is 2019.. :D
- Province1108 4y agoNot really when the terms of private financing during the bull run were very generous for valuations and terms. There are big downsides to being public, including all the regulatory requirements and pandering to institutional investors. Now the bull market is over and private money is tighter, they don't really have a choice but to raise money publicly.
- ergocoder 4y agoGood for billionaire lords not employees. Coinbase on the other hand is very employee friendly in terms of liquidation. Their employees are rich as fuck with direct listing (no lockup) at the height of the market. Just think about it. Coinbase, who is ridiculed for being apolitical, treats employees better than Stripe.
- neonate 4y agohttps://archive.ph/GqSBm https://archive.ph/GqSBm
- djyaz1200 4y agoIs there any way to buy stock from employees now?
- drexlspivey 4y agoThere are secondary markets for private companies' shares (like EquityZen) but I believe you need to be an accredited investor to participate
- paxys 4y agoThere have always been ways. Find an employee and make them an offer. Or use one of the many private marketplaces.
- umeshunni 4y agoEquityZen had an offer to buy last week at a $75B valuation / $32 per share.
- JumpCrisscross 4y ago> EquityZen had an offer to buy last week at a $75B valuation / $32 per share That's wildly off market, like 30%+. That's high, even for a retail platform.
- magneticnorth 4y agoWhat do you mean by off market? Are you saying the value should be 30%+ higher or lower, and how did you get that? Obviously the usual kind of market isn't applicable here, so I'm curious what you mean.
- umeshunni 4y agoI think they mean it's 30% higher than 'market'. I've seen article stating that Stripe's current internal valuation is like 60B or so. That valuation might be what they're referring to.
- mkl95 4y agoTIL Stripe have lowered their internal valuation from $95bn to $63bn since mid 2022.
- paxys 4y agoConsidering so many public, profitable tech companies saw their valuations go down by 50-70% in that same period, that still seems too little of a cut.
- agloeregrets 4y agoThis assumes Stripe is not outperforming expectations. .which seeing the Amazon deal....
- objclxt 4y agoIt’s unclear that the Amazon deal is outperforming expectations versus a quid pro quo on AWS hosting.
- agloeregrets 4y agoEither is an upside. That’s a huge contract that any payment processor would kill for.
- bdcravens 4y agoPublic companies have more external influences on their valuation. It's not like they literally lost 50-70% of their intrinsic value, only what the market with the associated psychology says they are worth. Private companies can stick closer to that intrinsic value.
- mathattack 4y agoIntrinsic value involves discounting future cash flows. With rates up that should punish Stripe similar to the rest of the market.