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They could have hit $120B market cap at one point, but all public tech stocks are significantly down since then. For example, their closest competitor Adyen hit

They could have hit $120B market cap at one point, but all public tech stocks are significantly down since then. For example, their closest competitor Adyen hit $31, but is now at $14. So with this logic, Stripe's valuation would be almost exactly where it currently is. Yes, a lot of former employees could have become liquid. But a lot also would have had money tied up exactly the same way it is now, except on a much more volatile public market where their every move would be much more scrutinized. They're now providing liquidity to employees via this fundraise, too, which solves the only major drawback I can see with not going public earlier.

sangnoir 4y ago
> They could have hit $120B market cap at one point, but all public tech stocks are significantly down since then I think that's parent's point: investors and current stock holders could have transferred $120B from retail investors before the adjustment. Now they have to hold onto their own devalued stock like a bunch of rubes. /s
- danielmarkbruce 4y ago
  That isn't how it works. Going public at $120 bill valuation doesn't mean you raise $120 billion. They'd have raised something like they have here.
  - hgsgm 4y ago
    It is how it works, selling at inflated valuation, but a fraction of the $120B, not all of it.
    - danielmarkbruce 4y ago
      The "fraction" part is key....
- nimbuscoder 4y ago
  Ding ding ding
lotsofpulp 4y ago
The employees would have had the option to sell the Stripe stock and invest in something significantly less volatile, such as an index or bond ETF.
- gkoberger 4y ago
  Sure, some could. But between lock-up periods and vesting, almost everyone working at the company wouldn't be in the position to be able to do this.
  - idopmstuff 4y ago
    Lockups are usually 90-180 days, and Stripe is old enough that lots of employees are fully vested. Maybe a significant number of employees wouldn't be in a position to because their growth means that most employees would've been hired relatively recently in that timeframe, but the people who were then since the early days and who have the most equity would all have been able to sell before the market turned down.
  - ant6n 4y ago
    You can short sell or buy put options to protect downside in case of a crash.
    - sokoloff 4y ago
      Many company trading policies prohibit either of those transactions in company stock. (Some even prohibit entering into covered call transactions.) Every public company that I've worked for prohibited short selling and naked options contracts on our shares. All but one (Merrill Lynch) prohibited covered calls.
      - ant6n 4y ago
        How could that be enforced, if one has some separate brokerage account (or one‘s wife). Perhaps some hedging with similar stock is possible.
mytailorisrich 4y ago
The problem employees have is that they cannot sell their shares because the company is private. If Stripe was public, considering they would be a big player, buying and selling shares would be instant on your favourite platform/bank. However you look at it, missing the previous favourable window for an IPO is a huge mistake.
- muzz 4y ago
  Isn't there a secondary market for the shares? Also, if/when a company has too many shareholders it has to release it's financials to the public, and at that point it might as well be public. Facebook faced this issue in 2012, although not sure if the law has changed since then.
  - JumpCrisscross 4y ago
    > a secondary market for the shares Only for Stripe’s investors, founders and early executives.
  - granshaw 4y ago
    No. Hardly any startup allows common employees to sell options on the secondary market
    - MarkMarine 4y ago
      It's worked for me, and I know there was a pretty healthy secondary market for some of the big tech unicorns before they went public. I sold pre-market shares in a large education startup about a year before IPO, at about 50% of the IPO price, so it was a loser for me and a win for the investor in Cypress that bought the shares.
      - skeeter2020 4y ago
        I think you were the exception though; I've never seen a start-up up close that allows you to trade or even pledge your equity for any purposes.
twblalock 4y ago
One of the nice things about being a public company is that you can give employees RSUs for a public company's stock that they can sell whenever they want, rather than options which are very limited. If they had gone public they could give their employees a much more flexible stock compensation.
kelnos 4y ago
> So with this logic, Stripe's valuation would be almost exactly where it currently is. Right, but that's fine. Because investors and employees would have already had the opportunity to offload some (or even all) of their equity at a high price that they may not see again for years, if ever. It would have been good to at least that opportunity! Yes, the company would then be subject to more scrutiny as a public company, and the inevitable stock price drop would be a problem. But... that's fine too?
tempsy 4y ago
Rivian IPO’d at like $180B with no sales that’s how insane the 2021 market was
wonnage 4y ago
Going public isn't for paying employees... They had a chance to raise at 3-4x what they're worth now and blew it for the foreseeable future
koolhead17 4y ago
They took 50% valuation cut raising this.
- camhart 4y ago
  The valuation cut happened regardless of raising this. They raised at a time when the valuation was down 50%. Raising it just made the valuation be an agreed upon, public number.
shapefrog 4y ago
They were holding out for a $500bn valuation.
smileysteve 4y ago
> but all public tech stocks are significantly down since then But they would have raised that money. As long as they didn't need to raise again; the current stock price only matters to shareholders (including employees that may miss the window)

sangnoir 4y ago

> They could have hit $120B market cap at one point, but all public tech stocks are significantly down since then I think that's parent's point: investors and current stock holders could have transferred $120B from retail investors before the adjustment. Now they have to hold onto their own devalued stock like a bunch of rubes. /s

danielmarkbruce 4y ago
That isn't how it works. Going public at $120 bill valuation doesn't mean you raise $120 billion. They'd have raised something like they have here.
- hgsgm 4y ago
  It is how it works, selling at inflated valuation, but a fraction of the $120B, not all of it.
  - danielmarkbruce 4y ago
    The "fraction" part is key....
nimbuscoder 4y ago
Ding ding ding

lotsofpulp 4y ago

The employees would have had the option to sell the Stripe stock and invest in something significantly less volatile, such as an index or bond ETF.

gkoberger 4y ago
Sure, some could. But between lock-up periods and vesting, almost everyone working at the company wouldn't be in the position to be able to do this.
- idopmstuff 4y ago
  Lockups are usually 90-180 days, and Stripe is old enough that lots of employees are fully vested. Maybe a significant number of employees wouldn't be in a position to because their growth means that most employees would've been hired relatively recently in that timeframe, but the people who were then since the early days and who have the most equity would all have been able to sell before the market turned down.
- ant6n 4y ago
  You can short sell or buy put options to protect downside in case of a crash.
  - sokoloff 4y ago
    Many company trading policies prohibit either of those transactions in company stock. (Some even prohibit entering into covered call transactions.) Every public company that I've worked for prohibited short selling and naked options contracts on our shares. All but one (Merrill Lynch) prohibited covered calls.
    - ant6n 4y ago
      How could that be enforced, if one has some separate brokerage account (or one‘s wife). Perhaps some hedging with similar stock is possible.

mytailorisrich 4y ago

The problem employees have is that they cannot sell their shares because the company is private. If Stripe was public, considering they would be a big player, buying and selling shares would be instant on your favourite platform/bank. However you look at it, missing the previous favourable window for an IPO is a huge mistake.

muzz 4y ago
Isn't there a secondary market for the shares? Also, if/when a company has too many shareholders it has to release it's financials to the public, and at that point it might as well be public. Facebook faced this issue in 2012, although not sure if the law has changed since then.
- JumpCrisscross 4y ago
  > a secondary market for the shares Only for Stripe’s investors, founders and early executives.
- granshaw 4y ago
  No. Hardly any startup allows common employees to sell options on the secondary market
  - MarkMarine 4y ago
    It's worked for me, and I know there was a pretty healthy secondary market for some of the big tech unicorns before they went public. I sold pre-market shares in a large education startup about a year before IPO, at about 50% of the IPO price, so it was a loser for me and a win for the investor in Cypress that bought the shares.
    - skeeter2020 4y ago
      I think you were the exception though; I've never seen a start-up up close that allows you to trade or even pledge your equity for any purposes.

twblalock 4y ago

One of the nice things about being a public company is that you can give employees RSUs for a public company's stock that they can sell whenever they want, rather than options which are very limited. If they had gone public they could give their employees a much more flexible stock compensation.

kelnos 4y ago

> So with this logic, Stripe's valuation would be almost exactly where it currently is. Right, but that's fine. Because investors and employees would have already had the opportunity to offload some (or even all) of their equity at a high price that they may not see again for years, if ever. It would have been good to at least that opportunity! Yes, the company would then be subject to more scrutiny as a public company, and the inevitable stock price drop would be a problem. But... that's fine too?

tempsy 4y ago

Rivian IPO’d at like $180B with no sales that’s how insane the 2021 market was

wonnage 4y ago

Going public isn't for paying employees... They had a chance to raise at 3-4x what they're worth now and blew it for the foreseeable future

koolhead17 4y ago

They took 50% valuation cut raising this.

camhart 4y ago
The valuation cut happened regardless of raising this. They raised at a time when the valuation was down 50%. Raising it just made the valuation be an agreed upon, public number.

shapefrog 4y ago

They were holding out for a $500bn valuation.

smileysteve 4y ago

> but all public tech stocks are significantly down since then But they would have raised that money. As long as they didn't need to raise again; the current stock price only matters to shareholders (including employees that may miss the window)