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by rchaud 913 days ago
Not a single word about revenue or profits, just about how much it was 'valued' at. A lot of VC money is just holding up Potemkin villages of 'innovation'.
4 comments

For Bird, they were sold on a SPAC at $154, so mission accomplished for the VCs. Retail is left holding the bag now.
Well spacs were heavily regulated over the last two years, that combined with the inflationary climate should mean things like this are done with for now.
J need to start shorting these IPOs on day one.
If you want to do such a random approach then do buy a bit off all because then you‘re upside goes toward infinite while downside is at most 100%. If you short, your downside goes toward infinite. Plus the market can stay irrational longer than you can stay solvent.
I don't think people mean literal short positions. The safest way to do this would be to buy long-dated PUTs, and roll them if necessary. Not that that's free -- which goes to your "irrational longer than you can stay solvent" point.
Someone should go to jail for that, but it is a highly regulated market, so it is ok.
SPACs (basically going public as a shell corp) are chosen specifically because it allows company insiders to cash out their equity without disclosing as much as regular IPO companies.
Yea, fully aware. I was working at a company last year that almost SPAC’d. Maybe you missed my sarcasm?
Because that's the true "innovation" that has been coming out of Silicon Valley for the past 10 years or so: losing hundreds of millions or billions of dollars for years without as much as a hint of a plan to become profitable.
Sounds like a pump and dump with extra steps. Hype up any obvious future failure to pump the stock to crazy valuations, then dump and leave the suckers holding the bags. All enabled by zero interest rates, and VCs were willing to fund some because they knew there's gonna be other suckers out there to enable them to raise the valuations.
The zero interest rates make getting loans cheap, but aren’t there angel investors who lose their investments recommended by VCs?
The angel investor has the same approach as VCs: if 1 out of 10 companies in the portfolio do well, that's enough.

VCs do however get a fee for assets under management, so they win even if their investors lose.

Just yesterday, comments here about SoFi. "They're still a startup and still in pre-profit growth mode".

Uh, they started lending operations in 2011. How long is that pre-profit growth mode expected to last? Another decade?

On an annual basis, they'd be right. Bird had a single quarter with a sliver of a profit followed then by a massive loss.
I wonder if that was just before a big VC round.
Never herd of a Potemkin village, had to look it up Thank you for the metaphor