I live in Songdo (the city featured in the article), and I think I have to concur with their dystopian tone. This place felt “fake” or “manufactured” to me in some sense that I couldn’t put my finger on even before I knew that it’s a planned city. Like too much infrastructure built and the people never came to inhabit it. Not quite a ghost town, but in that direction.
I have to say that getting around without a car is rather nice in daily life, but the public transportation around town was disappointing. And it’s odd that it takes 45 minutes longer to get to the Incheon airport from my Songdo apartment than from downtown Seoul, despite being much closer.
> Had it been a small non-profit, or some bootstrapped startup, they may have been able to get cheap representation via the EFF or some other group that defends the public interest.
And they very likely would have lost.
I think that cft is insinuating that the law is not the same for the wealthy and well-connected and the poor.
>the owners are incredibly greedy not to accept a $3 billion cash offer
You can look at this another way -- Maybe greedy would be taking the life-changing amount of money here, and they're not because they actually like their jobs.
But that's a counterfactual. Once the pop occurs, the company could not have gone with a higher price and pocketed more cash. A rational actor should make the best decision they can make given the information they have at the time, place their bets, and take their chances. The article clearly made it seem like having a pop (as differentiated from having a higher stock price) was a favor that Twitter was doing investors, and that somehow this favor would be repaid by market at large via some mechanism that's totally mysterious to me. I'm honestly really baffled that this meme gets repeated so much, and I'm open to explanations.
Dutch auctions do sound good in theory, and I'm aware of what happened with Google's: a 17% pop, which left some money on the table, but much less than Twitter did. Google's stock did abnormally well in the months following, but it's hard for me to divine how much of this had to do with the IPO mechanism. In any case, I think a sample size of one is probably not enough to draw much of a conclusion one way or the other.
But it sort of does imply that. Here's the reasoning -- There's a liquid market of a lot of shares trading hands at $40+. Anybody who bought a share at $26 knows he or she can sell today for $40+. To a first approximation, choosing not to sell at $40 has roughly the same effect as choosing to buy at $40. If the price is supported at $40+, that's at least very suggestive evidence that enough buyers could have been found at that price in the first place.
Maybe I'm fundamentally missing something, but I have a very hard time seeing why Twitter should care all that much about how much their stock 'pops' at open. Sure, they should care deeply about the price it settles at, because that's how they'll attract talent in the future and bases how they'll price future offerings, but the actual amount of pop itself? I don't see it.
This gem from the article:
>Should a stock offering maximize value for the companies selling shares, for the investors looking to gobble those shares up or for early employees and funders? And why are investors buying the shares — because they love the company’s fundamentals or because they sense a good deal?
This is a ridiculously false dichotomy. In any efficient market, sellers are trying to raise the price as far as the demand will bear, and buyers should be willing to purchase up to their estimated value of the company, taking into account their risk tolerance. Price should be a tug-of-war between these actors.
The way I see it, there's only two possibilities:
1) Pre-IPO Twitter thought there was a realistic risk of not fully selling the shares they put up if they raised the price.
2) Twitter purposefully got less money in a fair market trade than they could have.
And (2) seems totally insane to me for a rational actor. (1) seems plausible; apparently these things are hard to price.