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?
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.
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...Originally Posted by Jeffrey
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
Financials continue receiving good news...
https://apple.news/AswDg5KXdR-S7YFkKJM6FsQ
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.
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.
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.