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Bill Ackman Wear Make Up? PSTH Stripe News SPAC Stocks To Buy VXY QQQ LCA FEAC
Does Bill Ackman Wear Makeup?
adminnOctober 19, 2020
PSTH Guru Mr:
While continuing to creepily look at mutual followers between various relevant parties, I noticed this Bill Gurley character.:
Notice how therearen’t any a16z guys on the list? That’s because they don’t get along:
Regardless, I read up on Gurley a bit which led me down a IPO/DL/SPAC rabbit hole.
From a fortune Article: (Sept 2019) (paywall here, bypass it with this:
Looking at Gurleys website, I noticed an Aug 2020 article (great read) where he goes into detail about how bad an idea IPOs are when compared to DLs or SPACS – especially where founders and existing shareholders are concerned.
From Bill Gurleys Blog:
Here is anexcerpt from the same blog:
“Who benefits from underpricing? Clearly the people that are handed the shares in the hand-chosen allocation process. On the IPO process the underwriters are agents for both the company and the buyside (the shareholders who are allocated shares). The IPO may stand-alone as the only very high-dollar transaction in our world where a single agent represents both sides of the transaction. In real estate, dual agency is frowned upon for obvious reasons — “At best, they say, dual agents can’t fulfill their fiduciary obligations to both parties. They can’t advance the best interests of both buyer and seller because those interests always diverge. At worst, dual agency creates a harmful conflict of interest.” Institutional shareholders have many different financial relationships with these investment banks and much more frequent interactions than the banks have with any single company. As a result the conflict is real. It is therefore natural to assume that underpriced IPOs are allocated to the best brokerage customers (and that many of these dollars return to the investment bank vis commissions). This is backed up by academic research. It has also been uncovered in email threads. And it also makes sense in light of the dual agency. Why would they give them to anybody else? Who would you give it to if you were in charge?”
This reminded me of some recent IPOs which provide the context for any potential decision the Stripe founders have to make:
Snowflake sold 28M shares @ $120 each during its IPO this September. The opening price was $245… In other words, SNOW left 3.5B on the table. Not to mention the extra fees associated with an IPO vs DL/SPAC and the dilution of new shares.
Meanwhile, Asana used a direct listing and sold it’s shares at $27 vs the wallstreet “reference” price of $21. The price hit $29 briefly and now has settled in the $24 dollar range. The private shareholders here were able to sell their shares at a premium.
Some random dude on reddit the other day, “but why would Stripe do a SPAC when they could just IPO..etc etc?” ….Well,maybe because they don’t want to get ripped off like snowflake did.
Riddle me this: what process could Stripe use to avoid the IPO rip-off but also provide primary capital for fun activities like, say, acquiring Paystack for 200M…?
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