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Looking back it feels like GOOG, FB, TSLA etc. all went IPO at reasonable valuations. Retail & public investors did benefit long term and continuing to get high

Looking back it feels like GOOG, FB, TSLA etc. all went IPO at reasonable valuations. Retail & public investors did benefit long term and continuing to get higher valuations in public is not a small feat compared to a VC valuation. A trillion dollar valuation seemed so hard back in the day and now there are so many companies in that list. What's the next level? Is this just signs that $ is no longer the inflating at the same rate over time and its the realistic inflation that is reflecting in the stock market? Prices of all goods surely has to follow to make up for the revenue needed to sustain these valuations and also the salaries to sustain the prices. Unfortunately, those who are not in the loop is not going to have a good time.

ml_basics 4mo ago
maybe we will look back and also think that the current slate of IPOs were reasonable valuations?
- lumost 4mo ago
  The critical view is that these IPOs are bumping up against physics. How many trillion dollar companies can the economy support? The US GDP is roughly 32 Trillion. A company with 100 billion dollars in revenue and 10x annual growth would be expected to increase the size of the economy by 3.2% in its first year, and about 30% in it's second year post IPO existing. While we could claim that such a company can grow by consuming a larger share of the GDP ... this would not bode well for future political stability, and nationalization would be a major topic. So your left with a fast take off scenario, a job apocalypse, or a massively reduced growth rate.
  - fittingopposite 4mo ago
    Wait for more inflation. See https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...
  - adammarples 4mo ago
    If Anthropic has anything line that level of success, it will also be at the expense of huge unemployment, because Claude is really competing with knowledge work
senko 4mo ago
> Looking back it feels like GOOG, FB, TSLA etc. all went IPO at reasonable valuations Yeah, looking back. At the time, I distinctly remember people were going batshit over the insane FB valuation. It wasn't at all obvious it was justified. Hindsight is 20/20.
HDThoreaun 4mo ago
I remember a ton of people talking about how FB ipo'd at way too high a valuation. Just checked and it opened at $38 and was $19 3 months later
- DanielHB 4mo ago
  I think this is usually the case for most IPOs, insiders cash out, index-funds buy in. Basically it is a one-time technique for investors to extract money from pensions. If you try to configure the index-fund to avoid this problem it is not longer passively managed as each new stock needs to be evaluated in a (at least) semi-subjective manner.
epolanski 4mo ago
Facebook has been reasonable only in hindsight. IPO was in the 50B $ valuation range, and at the time, there wasn't any hint it made any financial sense. Of course, hindsight is hindsight, but for every Facebook there's been countless IPOs of tech companies shrinking their IPO valuations by 90% in the following years.

ml_basics 4mo ago

maybe we will look back and also think that the current slate of IPOs were reasonable valuations?

lumost 4mo ago
The critical view is that these IPOs are bumping up against physics. How many trillion dollar companies can the economy support? The US GDP is roughly 32 Trillion. A company with 100 billion dollars in revenue and 10x annual growth would be expected to increase the size of the economy by 3.2% in its first year, and about 30% in it's second year post IPO existing. While we could claim that such a company can grow by consuming a larger share of the GDP ... this would not bode well for future political stability, and nationalization would be a major topic. So your left with a fast take off scenario, a job apocalypse, or a massively reduced growth rate.
- fittingopposite 4mo ago
  Wait for more inflation. See https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...
- adammarples 4mo ago
  If Anthropic has anything line that level of success, it will also be at the expense of huge unemployment, because Claude is really competing with knowledge work

senko 4mo ago

> Looking back it feels like GOOG, FB, TSLA etc. all went IPO at reasonable valuations Yeah, looking back. At the time, I distinctly remember people were going batshit over the insane FB valuation. It wasn't at all obvious it was justified. Hindsight is 20/20.

HDThoreaun 4mo ago

I remember a ton of people talking about how FB ipo'd at way too high a valuation. Just checked and it opened at $38 and was $19 3 months later

DanielHB 4mo ago
I think this is usually the case for most IPOs, insiders cash out, index-funds buy in. Basically it is a one-time technique for investors to extract money from pensions. If you try to configure the index-fund to avoid this problem it is not longer passively managed as each new stock needs to be evaluated in a (at least) semi-subjective manner.

epolanski 4mo ago

Facebook has been reasonable only in hindsight. IPO was in the 50B $ valuation range, and at the time, there wasn't any hint it made any financial sense. Of course, hindsight is hindsight, but for every Facebook there's been countless IPOs of tech companies shrinking their IPO valuations by 90% in the following years.