
Morgan Stanley Marks Down Its Stake in Palantir, Dropbox - ktamura
http://fortune.com/2016/02/26/morgan-stanley-palantir/
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cft
I recently sense a certain desperation from the large big money funded start-
ups. In the last two weeks, I have received $150 in free rides from Lyft and
$50 in free food from Sprig. I have been a Lyft user since 2013, and a Sprig
user since 2014, using them less and less, but I have never received such a
generous credit before.

~~~
askafriend
How have you received these promos? I'd like to use them too :)

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cft
I used Sprig a lot in the end of 2014 when I had to say at the office late due
to DDoS attacks, but I have no use for it otherwise. I received a poorly
penned up email from a recent Berkeley MBA graduate, working for Sprig. It
asked to give Sprig another chance and offered the first $20 credit. I used up
that credit on basically a single lunch $13+ tax +$2.75 delivery fee. Then
suddenly I received a push notification with another $20 credit the next day!
Then since I liked that game I invited my dev phone to Sprig and got another
$10...

With Lyft, I actually received $150 in credit total. I picked a coupon for $50
at SoMa food park. Then I received $50 credit for my 5 star rating, and then
suddenly my dev phone also received the same $50 credit since it had a dormant
Lyft account that I only used in 2014: apparently it had a perfect 5 star
rating too.

~~~
spydertennis
Violating the limit 1 per customer policy is stealing.

EDIT: I wasn't going to engage but with this many downvotes I feel obligated
to explain myself. Like I commented below, I'm not trying to tell you how to
act. I merely wanted to point out that just because it's easy doesn't make it
not wrong. As a group of people who actually run their own companies I would
expect us to know better.

~~~
chm
Is it stealing if the company _gives_ you the coupons? They could have
detected that his account already benefited from a 50$ rebate, no?

~~~
spydertennis
Look, I'm not the ethical police or anything, but I think it clearly is.

~~~
cft
I had a second phone with an _existing dormant_ Lyft account that I have used
in the past, and I _involuntarily_ received a promotion on that phone, in
addition to my active phone. Both phones were configured with the same payment
method by the way, same name, same card. How is this stealing?

With Sprig, I invited my second dev phone as an experiment, but I have never
used the remaining credit- I simply have very little use for their service.
And I can prove that. How is that stealing? I think you should be careful
laying anonymous accusations.

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lquist
I'm not 100% sure this is what's happening, but thought I'd share my
experience: I used to work at a hedge fund that sometimes held stakes in
private companies. Every year, we would have to mark the stakes to market.
However, we could not do the valuation ourselves; the valuation was done by
3rd party auditors. And these 3rd party auditors usually have no idea what
they are doing. Even if they are Big 4 auditors and the stakes are large :/

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jsprogrammer
Why would a hedge fund hire auditors who don't have any idea what they are
doing?

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freehunter
Welcome to the world of auditing. You hire an auditing company that knows a
lot, and they send you their newbies.

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harry8
And you manipulate them by hiring the same auditing firm for consulting and
ramp up the pressure when it comes time for them to give an unqualified
opinion. Those newbies and the audit partner will be crushed by the avarice of
the other partners selling consulting services. Work they would not get if
they were not the audit firm.

Whether it's legal or not it is corruption and makes a good case for
regulation. If you audit a firm, the audit firm and its related entities
cannot sell anything else to that firm and its related entities.

Is it likely? Well who would lobby for it? Who would lobby against it? How
much are they willing to spend. Democracy.

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boomzilla
A few takeaways:

\- Morgan owns a small percentage of Palantir, maybe 20 basic points. However,
this is big as Morgan and the big i-banks still have a lot of influence on the
big money funds. This will scare the LPs off and VC funding will dry up.

\- In my opinion, Palantir is still too expensive at ~15B valuation. I mean
how can it be more expensive than both Tableau, Splunk and Hortonworks
combined in the public market?

\- Dropbox seems to be hit the hardest when T. Rowe Price marked it down to
just 5B valuation. Still a great outcome if they can exit at the price point,
but it sucks for the late investors and recent employees.

~~~
rgbrenner
Palantir pulled in about 1b in revenue last year. Splunk 500m, and tableu and
hortonworks less than 40m each.

No idea on profit margins here... But it would be surprising if palantir was
NOT worth more than these three

~~~
cl42
Not sure where you're getting those numbers. Tableau is pulling in well over
$600M in revenue, and Hortonworks is over $100M, according to their public
financials.

~~~
rgbrenner
Thanks for that. Was using my phone at the time, took the first result from
google. Clearly quite old stats. Even the palentir number was from 2014 it
looks like. Here's an upvote for the correction.

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notthegov
How much of Morgan Stanley's business is from Primerica, the deceptive MLM
company? Primerica bought Smith Barney in 1987 whicu used egregious marketing
tactics to build its business. Then Morgan eventually bought them.

If anything, I'd downgrade Morgan Stanley's stock. They were recently fined
$3.2 billion for crimes causing the financial crisis. That news broke 1-2 days
after Morgan dropped nearly 7%.

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swingbridge
No surprise here. As with a lot of these multi-billion dollar valuations there
really wasn't a lot supporting the valuations apart from hype and promises of
future growth and solid finances. Now that those things aren't panning out
there's nowhere to go but down.

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mark_l_watson
Sorry if this is off the topic of Palantir's and Dropbox's diminishing
valuations:

I would like to see pushback by consumers against very large Internet
companies and corporations in general. Even though some businesses need to be
large for economy of scale, I think of non-local businesses as parasites. When
local goods and services are not directly exchanged then some remote business
entity is sucking off profit.

It seems like huge valuations are all part of a rigged game in much the same
way as the military industrial complex and mega sized corporations are rigged
games. Except for pushing back as a consumer to prefer smaller and local
businesses, I am not sure what else to do.

~~~
sokoloff
Why is smaller and local inherently better? In many cases, small and local
means less selection, higher prices, and more waste (duplicative inventory,
supply chain operations, management, and line staff)

~~~
adrenalinelol
In the context that the large corporations are a net negative for members of
the local economy on average at least (wages, jobs). When said economy no
longer becomes justifies the operating cost, the large company leaves and
those left behind have few options on how the fill the void. <insert Walmart
under-cutting small biz example here>

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chatmasta
What happens after these markdowns to the employees hired in the last 12
months? Presumably their options are now underwater and they have little
reason to stay anymore. Will these markdowns lead to a sizable exodus from the
companies?

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ropiku
Some companies decide to reprice the options and/or grant more options to help
with retention. Also companies with high valuation and closer to an exit give
out RSUs (so strike price 0).

~~~
pmikesell
And also - the price that employees pay for stock options is the common share
price which is appreciably different (2x - 20x) from the preferred price. The
preferred share price is what the investors paid, and it is that higher
valuation the ms is writing down. There's a much longer drop before employee
share are underwater in a pre-public company.

~~~
JonFish85
Yes and no. Sure on purely the face of it there is a much bigger gap before
they're underwater, but that's because the preferred shares carry some nice
benefits: preference, multipliers and possibly some control of the company.
Marking down the value of the preferred shares implies that those benefits
aren't worth what they paid a premium for, which means that common shares are
also less likely to be worth anything, since they generally get paid out only
if the preferred shares are converted or if there is money left over after
preferred shares get paid off.

