[tc313]

> The narrative between those two scenarios is drastically different.

Who cares about the narrative unless you need to raise capital again soon? The money you get in an IPO actually goes into the business, while the trading price of the stock has no impact on the business.

[mason55]

The banks care because they do this all the time. One way they convince people to buy into the shitty IPOs is to also get them access to the good ones. Then the bank can make the fees from taking shitty companies public without upsetting the investors who buy those shitty IPOs.

An individual company is not part of an iterative game but the underwriters and institutional investors are, and it creates misaligned incentives.

It’s the reason for the hype around direct listings. So far no one has raised money that way but it’s only a matter of time. The difference is between floating publicly and floating publicly with a raise is basically nothing.

[triceratops]

Airbnb employees get paid in stock. For many it may be as much as 40% of their total compensation. If the price drops, those employees are going to be very upset. The trading price matters very much.

[actuator]

Only the ones who join now. I am sure the pre IPO employees are more than happy.

[triceratops]

Pretty sure they've been paying pre-IPO employees in RSUs for a while by now. Most late-stage companies stop paying options at a certain point. And even the pre-IPO employees will need to be paid RSUs in the future to retain them.

[actuator]

Aren't RSUs granted like regular stocks are?

Say, I join a public company. If they say they will pay me 500k USD worth of stocks, it generally means that I get 500k/(average share price of month, share price on stock offer date etc.) stocks subject to vesting cycle. Basically, I have fixed number of shares from that point and they appreciate or depreciate with the market.

I am assuming if AirBnB offered 500k USD of RSUs similarly and the RSU price was say 50. That means the person had 10k RSUs subject to vesting cycle. So, if the stock price is 120 now they have 1200k USD worth of stocks subject to vesting cycle.

[triceratops]

That's my understanding too. But if the RSU was granted at $50 and the price drops to $30, the employee is going to be quite upset (this could've happened to me at a different company if I had taken a certain offer). That's why I said that the share price continues to matter to the company, even post-IPO.

[jmcdl]

Expecting share prices to only go up and not move with broader market cycles would be quite naive. Maybe the fed will succeed in keeping this bubble from popping forever, but I certainly wouldn't be counting on it when considering any offer.

[jliptzin]

Yea, plus people completely forget the narrative anyway after 2 weeks. No one really has any attention span whatsoever.

[TheCoelacanth]

Your shareholders, the owners of the company who you are working for, care about what the trading price is.

[tc313]

Surely they don’t care about it all the time — only when they wish to sell it. One would think that managers who make decisions based on business value — rather than stock “narratives” — would create the most value for long-term owners of the company.