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  1. #1321
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by YmoBeThere View Post
    On the more speculative side of things, did anyone get some AirBnB or DoorDash at the IPO price?
    Nope. I did add both to my personal monitor list and watched the DoorDash movement with interest. Hopefully nobody had market orders in, could have gotten a nasty surprise.

  2. #1322
    Quote Originally Posted by bundabergdevil View Post
    Nope. I did add both to my personal monitor list and watched the DoorDash movement with interest. Hopefully nobody had market orders in, could have gotten a nasty surprise.
    AirBnB now trading at $162 off an IPO price of $68. Screw the desk, I'm booking the gain. But then I don't ever get allocations so...

  3. #1323
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by YmoBeThere View Post
    AirBnB now trading at $162 off an IPO price of $68. Screw the desk, I'm booking the gain. But then I don't ever get allocations so...
    I should know the answer to this, but didn't AirBnB's bankers basically screw them out of a ton of money? When the IPO more than doubles on day one, in my book, that means it should have been priced a lot higher, generating more money for AirBnB. Basic supply and demand. I recognize that optically it is nice to have a little pop on day one, but this is a lot more than that. But this seems to happen all the time.

    I found an article that partially but not fully answers my question, as the same thing seemed to happen with the Doordash IPO. Apparently they both used a pricing mechanism that was supposed to better tease out the market demand (I thought that this is what the institutional salespeople were supposed to do?), but they didn't necessarily put that knowledge to use.

    https://www.barrons.com/articles/doo...article_inline

  4. #1324
    Quote Originally Posted by CrazyNotCrazie View Post
    I should know the answer to this, but didn't AirBnB's bankers basically screw them out of a ton of money? When the IPO more than doubles on day one, in my book, that means it should have been priced a lot higher, generating more money for AirBnB. Basic supply and demand. I recognize that optically it is nice to have a little pop on day one, but this is a lot more than that. But this seems to happen all the time.

    I found an article that partially but not fully answers my question, as the same thing seemed to happen with the Doordash IPO. Apparently they both used a pricing mechanism that was supposed to better tease out the market demand (I thought that this is what the institutional salespeople were supposed to do?), but they didn't necessarily put that knowledge to use.

    https://www.barrons.com/articles/doo...article_inline
    You're pretty much correct here. More or less a major "fail" by their investment bankers with respect to the pricing. It is always difficult to predict exactly where these IPO stocks may open but usually they aim for a 10 to 20% "pop" off of the IPO price. No doubt that AirBnB left a LOT of money on the table (that went into the pockets of those investors lucky enough to get an initial allotment). They may not be happy but a risk you take.

    There is a "Duke" connection with AirBnB. My classmate at Duke Law School was appointed the general counsel of AirBnB about a year ago. I assume he got a ton of stock options to join the company?

  5. #1325
    Quote Originally Posted by CrazyNotCrazie View Post
    I should know the answer to this, but didn't AirBnB's bankers basically screw them out of a ton of money? When the IPO more than doubles on day one, in my book, that means it should have been priced a lot higher, generating more money for AirBnB. Basic supply and demand. I recognize that optically it is nice to have a little pop on day one, but this is a lot more than that. But this seems to happen all the time.
    Screw who? If I’m on the senior management team and/or Board of Directors, holding a lot of stock and stock options, am I upset when the price doubles on day one?
    Last edited by Jeffrey; 12-10-2020 at 03:47 PM.

  6. #1326
    Quote Originally Posted by Jeffrey View Post
    Screw who? If I’m on the senior management team and/or Board of Directors, holding a lot of stock and stock options, am I upset when the price doubles on day one?
    Would you answer that the same if you were the corporate treasurer?

  7. #1327
    Quote Originally Posted by YmoBeThere View Post
    Would you answer that the same if you were the corporate treasurer?
    Yes, my bosses (senior management team and/or Board of Directors) and favorite customers (institutional investors, who received allocations) saw the value of their holdings double day one.

  8. #1328
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by Jeffrey View Post
    Screw who? If I’m on the senior management team and/or Board of Directors, holding a lot of stock and stock options, am I upset when the price doubles on day one?
    Don't they have a fiduciary responsibility to maximize proceeds to the company? If it sells at a higher price, they get their money either way, but by selling at a lower price they are leaving a lot of the company's money on the table.

    I'm looking at this from my professional perspective having spent time as a banker underwriting debt. There were no agency issues involved as management had no ownership of the debt so they were pushing us as the underwriting firm to get interest rates as low as humanly possible (the debt version of getting the stock price as high as possible).

  9. #1329
    Quote Originally Posted by CrazyNotCrazie View Post
    Don't they have a fiduciary responsibility to maximize proceeds to the company? If it sells at a higher price, they get their money either way, but by selling at a lower price they are leaving a lot of the company's money on the table.
    Exactly this...though I think this often gets overlooked as most of the parties involved are not disinterested observers to the process.

  10. #1330
    Quote Originally Posted by CrazyNotCrazie View Post
    Don't they have a fiduciary responsibility to maximize proceeds to the company? If it sells at a higher price, they get their money either way, but by selling at a lower price they are leaving a lot of the company's money on the table.

    I'm looking at this from my professional perspective having spent time as a banker underwriting debt. There were no agency issues involved as management had no ownership of the debt so they were pushing us as the underwriting firm to get interest rates as low as humanly possible (the debt version of getting the stock price as high as possible).
    As you know well, debt and equity are very different and unique instruments. In the case of debt, I agree. In the case of equity, it’s much more complex.

    I know you can take this up a few levels and I’m more than willing. However, we will probably confuse many and possibly/probably do more harm than good. Also, I’m not going to publicly share, many things I know, on this subject. Let’s move to PMs, when time permits.

  11. #1331
    Quote Originally Posted by Jeffrey
    However, I still think C will hit 70 in the next 12 months.
    Quote Originally Posted by Jeffrey View Post
    I thought it might be helpful to delve a little deeper into my selection process. In addition to understanding the impact of CECL on Citi, it’s very important to understand loan restructuring under the CARES Act...

    https://dart.deloitte.com/USDART/hom...ency-statement

    The sum of the two (CECL + CARES) are the key components of yesterday’s announcement...

    https://apple.news/AltjgguCTSr6UA8K_Nq4EiQ

  12. #1332
    Financials continue receiving good news...

    https://apple.news/AswDg5KXdR-S7YFkKJM6FsQ

    Clearly, a $900 billion stimulus deal would be another strong positive.

  13. #1333
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by Jeffrey View Post

    Clearly, a $900 billion stimulus deal would be another strong positive.
    Biden has also said he’ll push for a 3rd stimulus package once he takes office.

  14. #1334
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by bundabergdevil View Post
    Biden has also said he’ll push for a 3rd stimulus package once he takes office.
    Why do I suspect that Mitch will become re-concerned about the budget deficit? Am I clairvoyant?

  15. #1335
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by budwom View Post
    Why do I suspect that Mitch will become re-concerned about the budget deficit? Am I clairvoyant?
    Hah. Yeah, I was going to make that same comment. (Many) Republican politicians have a unique ability to only to care about spending when they’re not the ones doing it.

    There are some through and through deficit Hawks but even they seem to squawk less when their people hold the strings.

  16. #1336
    Quote Originally Posted by bundabergdevil View Post
    Biden has also said he’ll push for a 3rd stimulus package once he takes office.
    I like Biden’s play... take what you can get in December and then try for more in January.

    As usual, I’m basically clueless about Trump’s, after the fact, play ($2k/$4k). I’m glad Mr. Market usually ignores POTUS’s daily roller coaster.

  17. #1337
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by Jeffrey View Post
    I like Biden’s play... take what you can get in December and then try for more in January.

    As usual, I’m basically clueless about Trump’s, after the fact, play ($2k/$4k). I’m glad Mr. Market usually ignores POTUS’s daily roller coaster.
    I'm pretty sure Trump's move is less about disbursing money and more about tweaking Mitch who has been insufficiently servile of late

  18. #1338
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by Jeffrey View Post
    I like Biden’s play... take what you can get in December and then try for more in January.

    As usual, I’m basically clueless about Trump’s, after the fact, play ($2k/$4k). I’m glad Mr. Market usually ignores POTUS’s daily roller coaster.
    Along with a hopefully successful vaccine roll-out, helps explain (at least for me) some of the robust 2021 market growth predictions. IIRC, lots of 4000+ predictions for the S&P from the banks.

  19. #1339
    Quote Originally Posted by bundabergdevil View Post
    Along with a hopefully successful vaccine roll-out, helps explain (at least for me) some of the robust 2021 market growth predictions. IIRC, lots of 4000+ predictions for the S&P from the banks.
    Pfizer’s 100 million additional doses by July 31, of a ~ 95% effective vaccine, is certainly great news today. IIRC, the US now has enough commitment, of ~ 95% effective vaccines, to vaccinate 200 million people before August. Add in those who already have had Covid and US herd immunity might be a 3rd quarter 2021 reality.

  20. #1340
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by Jeffrey View Post
    Pfizer’s 100 million additional doses by July 31, of a ~ 95% effective vaccine, is certainly great news today. IIRC, the US now has enough commitment, of ~ 95% effective vaccines, to vaccinate 200 million people before August. Add in those who already have had Covid and US herd immunity might be a 3rd quarter 2021 reality.
    It's very good news, but we have to actually get those doses manufactured...I suspect Pfizer can pull it off, not so sure about Moderna...

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