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This part is confusing to me. Yes, the market is bad and their IPO would probably be way less than it would’ve been if the market was “healthier”. But if the m

by elAhmo 4y ago

This part is confusing to me. Yes, the market is bad and their IPO would probably be way less than it would’ve been if the market was “healthier”. But if the market recovers and they want to do an IPO then, wouldn’t they be in the same position if they IPOd now, and then growth of the market would cause their stock to grow as well?

lozenge 4y ago
Firstly, a good or bad IPO can be remembered for years as part of the reputation of the company. Secondly, yes their stock could grow after the IPO, however the stock would be publicly owned at that point so the profit would go to the public shareholders instead of the current holders of the stock (founders, investors, employees).
- elAhmo 4y ago
  In the 2nd case, you are assuming everyone cashes out and avoids missing on growth that would happen. If they keep the stock, or just sell partially (which would most likely be the case for many people, given how much money did Stripe raise to cover tax liabilities), they would be a part of the growth. I still think (and I might be wrong) Stripe put themselves in a corner position, and raising 6.5 billion USD after 13 years of operating to cover this cost seems like something that could definitely have been avoided.
waboremo 4y ago
Employees cannot wait, their shares expire without sale. These are being taxed. Stripe can wait, that isn't the problem for them and is what they're doing. The board can also waive these fees, but that shifts liability from Stripe to each individual employee in question and that's the last thing they want, to piss off early employees.
- elAhmo 4y ago
  I wasn’t suggesting to wait, rather than to IPO now. Employees could have liquid stock, I was suggesting a scenario where Stripe does the IPO now. If they then wait for the same time until they will wait until Stripe IPOs, the stock would grow to the same level.
myhrvold 4y ago
Stripe made the right move here. Going public is a huge move. You don't want to make a big decision like this because early employees couldn't have cashed out. There are lots of other considerations that come along with an IPO and Stripe is addressing the core problem (early employee liquidity) with a targeted solution. (And yes -- they would've been better off doing two years ago. But timing is hard, and that's not really relevant to their decision now, which is the best at the current time given the past.)
- elAhmo 4y ago
  I agree that decision to IPO is a massive one and it shouldn't be just driven by this specific situation, which was probably solved in people's best interest. But, they were put into this position for waiting for too long and not going public earlier. I have a feeling that Stripe is doing a classic 'emotional investor' mistake. They are considering their valuation to be 90b+, and see this as 'just 50, it will bounce back', not considering that company went from 0 to 50b. There is no guarantee that it will go above the current valuation, and anything below that is going to be harmful, even for current employees who were saved by this move.

by elAhmo 4y ago

lozenge 4y ago

Firstly, a good or bad IPO can be remembered for years as part of the reputation of the company. Secondly, yes their stock could grow after the IPO, however the stock would be publicly owned at that point so the profit would go to the public shareholders instead of the current holders of the stock (founders, investors, employees).

elAhmo 4y ago
In the 2nd case, you are assuming everyone cashes out and avoids missing on growth that would happen. If they keep the stock, or just sell partially (which would most likely be the case for many people, given how much money did Stripe raise to cover tax liabilities), they would be a part of the growth. I still think (and I might be wrong) Stripe put themselves in a corner position, and raising 6.5 billion USD after 13 years of operating to cover this cost seems like something that could definitely have been avoided.

waboremo 4y ago

Employees cannot wait, their shares expire without sale. These are being taxed. Stripe can wait, that isn't the problem for them and is what they're doing. The board can also waive these fees, but that shifts liability from Stripe to each individual employee in question and that's the last thing they want, to piss off early employees.

elAhmo 4y ago
I wasn’t suggesting to wait, rather than to IPO now. Employees could have liquid stock, I was suggesting a scenario where Stripe does the IPO now. If they then wait for the same time until they will wait until Stripe IPOs, the stock would grow to the same level.

myhrvold 4y ago

Stripe made the right move here. Going public is a huge move. You don't want to make a big decision like this because early employees couldn't have cashed out. There are lots of other considerations that come along with an IPO and Stripe is addressing the core problem (early employee liquidity) with a targeted solution. (And yes -- they would've been better off doing two years ago. But timing is hard, and that's not really relevant to their decision now, which is the best at the current time given the past.)

elAhmo 4y ago
I agree that decision to IPO is a massive one and it shouldn't be just driven by this specific situation, which was probably solved in people's best interest. But, they were put into this position for waiting for too long and not going public earlier. I have a feeling that Stripe is doing a classic 'emotional investor' mistake. They are considering their valuation to be 90b+, and see this as 'just 50, it will bounce back', not considering that company went from 0 to 50b. There is no guarantee that it will go above the current valuation, and anything below that is going to be harmful, even for current employees who were saved by this move.