
No U.S. tech company went public in Q1 2016 - elorant
http://qz.com/652261/the-market-for-tech-ipos-hasnt-been-this-awful-since-the-great-recession/
======
awinter-py
Traditionally (before the 90s) stock index growth was driven by retirement
investment, which is driven by demographics (more workers or richer workers).
Recently, most dollars added to public exchanges come from corporate buybacks
(companies seeking to go private).

The only disadvantage to private investment is liquidity. Otherwise, it's way
better to be non-public (less hostile takeovers, less activist investors, less
regulations, less mandatory transparency, less managing for 1Q instead of 5Y).

This feels like more evidence for a tipping point between capital and labor.

~~~
fludlight
Buybacks are driven solely by a desire to appease shareholders by increasing
earnings per share in a seemingly risk-averse manner. However, buybacks tend
to only happen when the valuation is already sky high. Only a handful of
companies have the discipline to buy back stock when the valuation is low and
pursue a secondary when it's high.

~~~
brianwawok
So all the people who make the buyback decisions are paid in stock. It is in
their own self interest to buy back as much stock as possible, and inflate the
per share price, right?

~~~
fludlight
In the short run, yes; but companies live and die by decisions about the
medium run.

------
cromulent
According to the FT it is simply part of a greater trend.

"This is a sign of US strength, not weakness. In many countries going public
may be the only way to raise permanent capital, and banks the only way to
finance investments, but the US has a sprawling venture capital industry,
deal-hungry private equity firms, relatively healthy banks, a private
placement market that is the envy of many other countries, and the most
vibrant corporate bond market on the planet."

[http://www.ft.com/intl/cms/s/0/534b5560-f7d1-11e5-96db-
fc683...](http://www.ft.com/intl/cms/s/0/534b5560-f7d1-11e5-96db-
fc683b5e52db.html)

[https://www.google.com/search?q=IPO+market+decrepit+as+going...](https://www.google.com/search?q=IPO+market+decrepit+as+going+public+loses+its+allure)

~~~
tremon
Not sure if I'd classify that as a strength though. All it indicates is that
there's a lot of wealth concentration.

~~~
fragsworth
Agreed. The idea that it is a strength smells a lot like trickle-down
economics.

~~~
nickoakland
FT writers are such free market fundamentalists they make WSJ writers look
like Bernie Sanders supporters.

~~~
justincormack
That's really not true. The FT is pretty varied but there is a lot of market
criticism.

------
droithomme
It's said that the Sarbanes–Oxley Act's requirements for publicly traded
companies made going public less desirable for many concerns, and this has
resulted in fewer public offerings over the last 14 years.

~~~
api
I've thought for a while that SarbOx created the unicorn. In the end all it
accomplished was to exclude the public from the best growth stocks.

The problem with SarbOx is complexity, overhead, and ambiguity. It would have
been possible to fix some of the excesses of revenueless dot.coms by adding a
few simple criteria, but instead we added a ton of burden and made public
markets undesirable.

I've also wondered if SarbOx might not have been a factor in real estate
hyperinflation by driving capital away from stock markets. It's gotta go
somewhere.

~~~
fludlight
SOX also created the going-private branch of banking/PE and served as a full
employment act for accountants.

~~~
api
So in other words it was a "work making" handout to the financial industry.
Bravo.

~~~
fludlight
It also made the industry a lot more honest. The shenanigans you hear about
these days pale in comparison to what people got away with during the 90s.

------
Animats
Almost all of last year's tech IPOs went down.[1] Some, way down.

    
    
       Twitter:      -32%
       LinkedIn:     -44%
       Pure Storage: -28% 
       Square:        -4% 
    

With numbers like that, overpriced "unicorns" know they'd have to IPO at a
huge discount from their exaggerated valuations.

This is a bubble, popping.

[1] [http://www.renaissancecapital.com/news/tech-sector-sell-
off-...](http://www.renaissancecapital.com/news/tech-sector-sell-off-
sends-2015-ipos-below-issue-challenges-2016-tech-38154.html)

~~~
icedchai
LinkedIn has been public since 2011. Twitter since 2013. These are not recent
IPOs.

------
dacompton
Well, Senseonics went public in Q1 2016.
[http://www.senseonics.com/](http://www.senseonics.com/)

------
nxzero
SEC should just introduce a new class of IPO's for accredited investors that
allows private companies to get liquidity without being public.

~~~
TheM00se
You do realize that you are asking the SEC to create a class of "Special
investors" that would have special rules. This is a horrible and undemocratic
idea.

~~~
HappyTypist
That already exists, right now. He was using sarcasm.

------
s_dev
Funding was flat in Europe in Q1 if you exclude Spotify.

[http://tech.eu/features/9202/european-tech-
funding-q1-2016/](http://tech.eu/features/9202/european-tech-funding-q1-2016/)

~~~
karangoeluw
Why would you exclude Spotify?

~~~
grotsnot
It's just an outlier to the trend. So "exclude" in this case is just a
qualifier to the statement and doesn't reflect an actual desire to treat the
company differently.

~~~
SilasX
Okay, but the fundamental thing that differentiates startups is that outliers
dominate the results and change their aggregate properties. You might as well
say that Scuzzball Fire Insurance honored all of its obligations, except the
few houses that burned down.

~~~
darkclarity
Spotify's an integral part of the entertainment industry, there's little point
treating it as anything other than an oddity.

------
ihsw
Is this indicative of a lack of faith in the banking industry?

Speculative investments are on a steep decline as well, with many folks buying
into plain-jane savings accounts with sub-1% rates of return rather than more
exotic financial tools.

Will we see reforms to woo them back, or is the Federal government generally
unconcerned (other than paying lip-service to the banks)?

~~~
maxxxxx
The last years/decades have made pretty clear that the financial sector will
happily screw over their customers whenever they can. No wonder who are not
financial experts prefer safe investment where they at least don't lose money.

------
thecopy
Looking at the graph it sure looks just like normal fluctuation.

~~~
tzakrajs
The mortgage derivative crash of 08 was more than a mere fluctuation, but I
follow your logic.

------
ommunist
Market saturation. Lets wait for quantum computing and wetware programming.

------
known
Solution

1\. Regulate market capitalization of corporations

2\. Tax corporate revenues, not profits

~~~
slavik81
Taxing revenue would cause massive consolidation. Right now you might have a
farmer sell their crop to a wholesaler, who then organizes it along with the
output from other farmers and sells it on to the supermarket who in turn sells
it to you. If you taxed revenues rather than profits, you'd end up taxing the
total value of the goods 3 times rather than 1.

Ultimately, those companies would all merge or be bought out until they were
one company to just pay taxes once.

~~~
theseatoms
I don't disagree. But it's curious that the gov't taxes corporations' profits
and individuals' revenues.

~~~
wnewman
"gov't taxes corporations' profits and individuals' revenues"

Say what? As I understand it, a basic theme of income taxation for me as an
individual in the USA, and indeed most (perhaps all?) western countries is
that if I buy something for B and sell it for S, I get taxed for S-B income.
And as I understand it, that basic theme really is the way that it works for a
lot of businesspeople, though they may need to be quite careful to jump
through certain hoops (particular kinds of recordkeeping e.g.) to ensure that
it works that way reliably. And it is roughly the way it works for individuals
not ordinarily considered businesspeople when they buy and sell things like
residences and securities, although it's sometimes wrapped up in extra
weirdness like special real estate tax categories and short term vs. long term
security capital gains.

What country or countries are you referring to?

Or are you just referring to the fact that employees employment expenses are
not as eligible for deduction as many business expenses, securities
transactions, and real estate transactions? (And, um, bringing in
"corporations" for some rhetorical reason that I can't fathom?) That would
make it roughly true to say "taxes business profits but taxes labor revenues."
But to characterize that as "gov't taxes corporations' profits and
individuals' revenues" seems more nearly false.

Also, that _is_ a radically different tax treatment of labor revenues and
business revenues, but you don't explain what you find particularly curious
about that. For good or for ill, radically different economic policy treatment
of labor revenues and business revenues is pretty widespread, not limited to
tax policy. E.g., consider how business monopolistic collusion to restrict
supply is broadly forbidden even when the collusion is wholly voluntary, while
labor unions are not just allowed to collude voluntarily to restrict the
supply of labor but supported in actively preventing rivals from providing a
supply of labor.

~~~
theseatoms
> That would make it roughly true to say "taxes business profits but taxes
> labor revenues."

You've put it much better than I did. What I find curious (and insulting) is
that the government effectively values my time and energy at $0.

------
hkmurakami
Pretty standard practice to delay IPOs during a chilly market. We delayed IPO
from summer 2011 to winter 2011 at my previous employer for this reason
(remember the debt ceiling crisis nonsense?)

~~~
scurvy
Chilly market? We're less than 100 points off the all time high in SPX (which
was set last year). You could say the bull run is in its last stages, but it's
far from chilly.

~~~
tim333
Though as another another article today mentioned
[https://news.ycombinator.com/item?id=11419281](https://news.ycombinator.com/item?id=11419281)
much of the SPX is driven by companies buying back their own shares out of
profits. It may be chillier for loss making unicorns that can't do that - see
Box etc.

