undefined | Better HN

0 pointstempsy5y ago0 comments

all he said was it makes the stock market look bad when some people double their money in a day.

has nothing to do with whether Airbnb was screwed over by wall street.

no one can predict the public market appetite in this environment. Airbnb was arguably richly valued at $50B as is and is richly valued at $100B. Setting your price too high and then crashing your stock is worse for the company due to tax implications and overall investor sentiment.

0 comments

BoiledCabbage5y ago

> Setting your price too high and then crashing your stock is worse for the company due to tax implications and overall investor sentiment.

Raising double the money is a bad thing due to "investor sentiment"? What tangible negative impact does that have on Airbnb. You're gonna need to explain this one. Because it really sounds to me like repeating a talking point told by a counterparty.

tempsyOP5y ago

you don’t raise double the money because you set the price 2x unless that was your plan. you would sell half the shares if you had a fixed goal eg $3B.

you decide on how much you need and then decide the number of shares you sell at what price. it isn’t like they would’ve raised twice the money if they upped the share price.

BoiledCabbage5y ago

> you don’t raise double the money because you set the price 2x unless that was your plan. you would sell half the shares

You keep throwing out assumptions without anything backing them.

They at a price and amount for sale. Absent an auction set price it's almost certain that price is inefficiently set. And you're arguing that it was efficiently set when we have tens of billions of proof it wasn't efficiently set via yesterday's stock move.

tempsyOP5y ago

I said nothing about efficiency. All I am arguing is that Airbnb didn’t screw themselves. No money was taken from them. They raised the money they wanted to raise at a price they thought would be tolerable by the public markets.

2 more replies

whimsicalism5y ago

They handed over boatloads of money because that is the toll that Wall Street firms exact in illiquid markets and that is how Wall Street firms make money.

I'm not saying that they were screwed over.

> all he said was it makes the stock market look bad when some people double their money in a day.

That is one part of what he says, very misleading. He describes it as an "error" that is due to a flaw in the "way Wall Street is organized" (ie. around capitalizing on IPOs). That's more than just saying the markets "look bad".

tempsyOP5y ago

No one could’ve predicted Airbnb would be bid up to $100B.

Just because you’re Goldman does not mean you can predict where a share price will go on day 1. we are in a massive speculative cycle that isn’t just impacting Airbnb’s IPO but a lot of tech stocks, many up 1x-10x in a year.

So to try to argue that wall street purposefully set the price too low when $50B is already high given travel hasn’t fully recovered yet is makes no sense.

whimsicalism5y ago

> Just because you’re Goldman does not mean you can predict where a share price will go on day 1.

The EMH doesn't apply if there wasn't a previous market price. This was an absolutely massive move, and I'm supposed to believe there was no indication of that ahead of time.

You can definitely model supply and demand if you're Goldman - I'm not saying that you can predict market moves, but this wasn't a move from a previous efficient market-determined price.

> $50B is already high given travel hasn’t fully recovered yet is makes no sense.

$50B is not high by definition given the current market pricing.

tempsyOP5y ago

I don’t really know why you’re so caught up in this.

Airbnb could take advantage of their stock price and issue more shares in a secondary offering tomorrow if they wanted to and “screw” the investors who doubled their money in a day by diluting them. It’s not like this was their one shot of raising money ever again.

There’s really nothing for Airbnb to be mad about.

j / k navigate · click thread line to collapse

0 comments

BoiledCabbage5y ago

> Setting your price too high and then crashing your stock is worse for the company due to tax implications and overall investor sentiment.

tempsyOP5y ago

you don’t raise double the money because you set the price 2x unless that was your plan. you would sell half the shares if you had a fixed goal eg $3B.

you decide on how much you need and then decide the number of shares you sell at what price. it isn’t like they would’ve raised twice the money if they upped the share price.

BoiledCabbage5y ago

> you don’t raise double the money because you set the price 2x unless that was your plan. you would sell half the shares

You keep throwing out assumptions without anything backing them.

tempsyOP5y ago

2 more replies

whimsicalism5y ago

They handed over boatloads of money because that is the toll that Wall Street firms exact in illiquid markets and that is how Wall Street firms make money.

I'm not saying that they were screwed over.

> all he said was it makes the stock market look bad when some people double their money in a day.

tempsyOP5y ago

No one could’ve predicted Airbnb would be bid up to $100B.

So to try to argue that wall street purposefully set the price too low when $50B is already high given travel hasn’t fully recovered yet is makes no sense.

whimsicalism5y ago

> Just because you’re Goldman does not mean you can predict where a share price will go on day 1.

The EMH doesn't apply if there wasn't a previous market price. This was an absolutely massive move, and I'm supposed to believe there was no indication of that ahead of time.

You can definitely model supply and demand if you're Goldman - I'm not saying that you can predict market moves, but this wasn't a move from a previous efficient market-determined price.

> $50B is already high given travel hasn’t fully recovered yet is makes no sense.

$50B is not high by definition given the current market pricing.

tempsyOP5y ago

I don’t really know why you’re so caught up in this.

There’s really nothing for Airbnb to be mad about.

j / k navigate · click thread line to collapse