I'm betting student loans are going to have something to do with it.
1,321 karma · joined August 3, 2010
As far as I can tell there haven't been murmurings of panic. It seems like a lot of these companies are doing ok enough. There's potential & they are "taking time to get it right" before going public. And they haven't had trouble finding large enough investment money to keep them going.
It's kind of painful to have been an employee at these places though because the wait is long. You were under compensated salary-wise relative to market while you worked there and the equity might be worth nothing or you might have to wait 8 years to see.
That's part of the reason why I next want to work at a public company where the stock actually has value when it vests.
Pinterest is 7 years old, has close to 200M MAUs, and is still growing at a good enough pace for investors to justify this kind of valuation. Pinterest also excels in huge markets which you are probably not familiar with: recipes, weddings, fashion, and interior design.
Even though most people you know don't use it, there are still 200+ million people out there in other demographics that do use it. Probably a lot of them have never heard of Twitter :-D.
FWIW I think Twitter is undervalued as well.
My guess is that it's another way to hire people who don't know what they're worth and underpay them for a few years until the employees figure it out. Kind of like what the industry already does with new grads.
That means, today, those grants are at least 100k - 350k shares at a $0.99 strike price (assuming no other splits). Or $2,300,000 to $8,050,000.
Unless I'm missing something?
Edit: Ah the numbers above are actually too low. If you look that email also lists the percentages. 10,000 shares at that time was 0.022% which at the current valuation is actually $5,280,000 less some likely dilution.
In fact, Snap's extreme generosity to employees has already swelled the existing share count. In 2016, it awarded 105 million new restricted share units (RSUs). All of those units, plus around 80 million awarded in previous years, will vest with the IPO. Those grants will represent one in six of Snap's shares. At $16 a share–the estimated high end for the price paid by the underwriters–those grants will enrich its 1,859 employees by $2.9 billion, averaging $1.5 million per person, although the rewards are, as usual, heavily skewed towards the top brass. And that's just a taste of what's coming.
So, all the numbers are wacky and who knows.
Could you explain what this means a little more? What is a participating contribution in this context? Are these shares employees were able to sell in the IPO?
They say growth slowed from 7% QOQ to 3.2% QOQ. Having only 3.2% Q4 QOQ growth is pretty worrying considering they had ~14% QOQ growth in every prior Q4.
What does this sentence mean?
Pets.com was insanity. It IPOed 15 months after it was founded and had no fundamentals of any kind. Snap is 6 years old and has hundreds of millions of retained users.
From the wikipedia page for Pets.com:
Despite its success in building brand recognition, it was uncertain whether a substantial market niche existed for Pets.com.[5] No independent market research preceded the launch of Pets.com.[5] During its first fiscal year (February to September 1999) Pets.com earned revenues of $619,000, yet spent $11.8 million on advertising.[5] Pets.com lacked a workable business plan and lost money on nearly every sale because, even before the cost of advertising, it was selling merchandise for approximately one-third the price it paid to obtain the products.[5]