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Old 18 September 2020, 09:41 PM   #4688
Xelorpepsi
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Join Date: Sep 2011
Location: UK
Posts: 306
Quote:
Originally Posted by logo View Post
SNOW was absurdly priced. At 75-80 it was steep but not unreasonable, the fact they boosted it to 120 yesterday last minute tells me all I need to know about management - greedy. Let the product speak for itself, not the stock price. Anyway, at an annual revenue of 500M (remember, NET is 400M, FSLY 300M), a share price at 240 is well >60B valuation in contrast to NETs 11B and FSLYs 8.5B. Can’t imagine who bought at over 300.... heavy bags. SNOW has higher annual growth, but all three are negative EPS.
It's called bookbuilding and has nothing to do with management's greed. Investment bankers just built their book and saw an opportunity to increase the share price because at $70-80 they were most likely 5x+ oversubscribed. At the end of the day, their role is to maximise the money raised at IPO, not to please the market. Lots of people also blame private investors, but at the end of the day they all took a huge financial risk and got rewarded. No one would have been sorry for WB if he had lost his money (he still needs to exit at some point though).

If anything, you could argue that bankers actually did not due their job well as they did not anticipate how hot the IPO would be and should have priced it way higher.
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