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2017: $79.6M revenue, ($38M)in losses.

9 months of 2018: $84M revenue, ($34.5M) in losses.

Costs seem generally under control except the significant growth (+66%) in G&A expenses.

Why the hurry to IPO?

My mostly uninformed opinion is that smart money smells blood around the corner and wants to cash out before it gets bad. Mass retail store closures, layoffs, IPOs, ...

Even if true, this will largely not affect a business like this. They make small money on each company and scale through the shear number of total companies that pay a few thousand dollars a month to use this service. People are not going to stop going on call because their revenue dropped 20%...

The market is still hot. You don't want to go IPO at say $50 and no trades. When the market crash everything will crash along with it. Some investors are probably very eager to cash out now than later.

Liquidity for one.

Conditions for an IPO are rarely perfect - you need to have the right internal situation, the right market conditions etc. etc. - so if the company is thinking of doing an IPO, and they can ... well then they're going to lean towards doing it.

VC's can cash out if they want and pass the buck.

That said, if they only have some major 'one time cost' dragging down earnings, and earnings will be spectacularly better next year ... it might be worth the wait. But even then - if the IPO suffers a little, but then rockstar numbers come out later, the stock will go up. So VC's that want to hold on have the option to do that.

Good market now, bad market likely in a year or two.

Why do you think bad market likely in a year or two?

We're way overdue for a recession, there are already signs of slowing, and historically after massive tax cuts for the rich, a recession follows a couple years later after the piper has to be paid. Signs all point to a recession in one to two years.

> Signs all point to a recession in one to two years.

People have been saying this for the past 7 years.

They're bound to be right some time though, as always.

Maybe, but people who actually know what they're talking about have only been saying it recently.

> citation needed

A year ago the markets zeitgeist was "synchronised global growth". Then it was "narrowing term spread on bond yields". Now it's "China and European growth slowdown" and "US Q1 earnings softness".

Getting off the news headlines, market prices for the last couple of years were broadly consistent with Fed interest rate projections -- slow but consistent rate raises last year and in 2017. That is no longer the case. Now the Fed has backed off the pace of raises and is (IIRC) projecting zero or one for the rest of the year, and markets are projecting rate cuts for the first time in a long time. If people think the Fed will need to cut rates, it's because they think inflation will be down, likely due to lower wage pressures from a softer labour market etc.

Other things: some market indicators have "gotten better". P/E multiples and similar metrics were historically high and have trended down (both due to price drops and earnings increases.) Blame interest rates rising last year IMO, why wouldn't ratios be high when rates are low? They're still high, but not worryingly so.

TBH I don't give much thought to the Chicken Littles. Maybe we'll have a technical recession this year or next, maybe due to trade, maybe due to China or Germany, but for the moment I think people in the markets broadly agree that things are long-run pretty healthy. Famous last words, I guess.

What's the trigger?

Pension, student and auto debt, I'd guess.

It's worth noting that since the collateralized housing debt scandal of the Global Financial Crisis, approximately nothing changed in regulation, and credit card and auto debt securitization has taken off in its place. Investors still want to put their money somewhere.

Who is the Lehman Brothers of the new securitized debt? That meltdown is coming.

Unlikely, either because of guarantees (student) or too small (auto loans). It’ll be the corporate bond market getting spooked, and a crunch when anyone running on cheap debt can’t service or refi it without default.

US auto loans have a total of 1.1 trillion outstanding, writing that off wouldn't affect the markets at all or increase the cost of debt?

That collateral is easily repo’d and disposed of. Think Rent A Center. The margins on the vehicles being sold make up for estimated losses.





I think multiple sectors of underfunded pension, student debt and auto debt all coalescing at once is the problem, not any one of them individually. You're also negating that folks defaulting, massively hinders their ability to move in the financial system. And yes, you can put cars back into the system the same way you can put houses back into the system, but it doesn't matter if no one wants cars.

> You're also negating that folks defaulting massively hinders their ability to move in the financial system.

Quite the contrary. Lenders will lend to you immediately after bankruptcy because you can't default again for seven years, for example. If you have bad credit, you can still get credit! Just at a higher interest rate. I am familiar with lenders who will get you a mortgage the day after foreclosure for 200-250 basis points over conventional rates (6-6.5% versus 4%, in this case).

Economic drag due to student loan debt that can't be discharged is a separate issue (with those debtors delaying or opting out entirely of home ownership and/or children). Pensions will get dumped onto the Pension Guarantee Corp with a reduced benefit payment to those entitled to such, and any federal debt will get inflated away through the Fed (not great, but what happens when you have your own central bank).

As I said, I think the only "great unwind" or credit crunch in the near future is corporate bonds.

What lenders you are specifically referring to?

Subprime credit cards: https://www.cardrates.com/advice/list-of-subprime-credit-car...

Subprime auto lenders: https://www.cyberleadinc.com/subprime-auto-lenders/

Nonprime mortgage lenders: https://www.nonprimelenders.com/lenders/

Prime = good borrower. Subprime/nonprime = not a good borrower.

Just quick examples, lots more out there. It is incredibly difficult not to qualify for credit entirely. Someone, somewhere will lend to you at an interest rate in accordance with your risk profile. Investors are hungry for returns.

Oh boy, ok. Just making sure that's what you'd say. Good luck out there pops.

Compared to earlier periods in history, us stock market prices have been very high for past few years. this doesn't necessarily mean us stocks are overvalued -- maybe all alternative investments have similarly high prices, or equivalently, low yields. But, lots more room for stock prices to go down in future than to go up.

Ignoring hand waving comments about market prices, re: us economy, arguably we might be about to see an upward trend in the unemployment rate, which is a leading indicator of recession, although perhaps part of the increased unemployment in the last published statistics was caused by the government shutdown.


> Why the hurry to IPO?

ITT: "A profitable tech company going public while there is still growth potential? Is this a scam?"

Aside from the liquidity and valid option of getting a funding round from underwriters has this seriously become a foreign concept in this market?

It's expensive, it's a hassle, some notable founders have publicly said they regret going public. I think letting insiders cash out is a great thing, but some disagree. From an outsiders perspective it seems like there's plenty of private liquidity for promising, growing businesses.

Seems reasonable to ask why they'd do it to me. I certainly wouldn't assume it's a "scam", but I don't think going public is the obvious good that (I hear) it once was.

Yes having to answer to the public markets and considering control issues of your company's shareholder composition can be a distraction.

I think you are underestimating what liquidity means. Liquidity means having access to the cheapest credit markets on the planet: commercial paper. Having access to the rest of the corporate bond markets too. Being able to dilute your shares and sell them at will. Being able to attract employees with tax efficient competitive compensation packages, again via share dilution so for free. People aren't just saying "liquidity" so that insiders can cash out of the stale balance sheet line items that they update once every 18 months.

A profitable company at a low valuation and larger addressable market is also a rare opportunity for non-accredited investors, solely because of the attitude of treating the public markets as an anethema and just using it to dump on everyone's mom's retirement account.

Half the growth in G&A expenses is due to their one-time donation to the Tides Foundation. If you back this out their expenses growth here is in line with everything else.

Their seed round was in 2010—early investors are likely pretty interested in an exit

Not to mention early employees

employees have no say on this matter

VictorOps was acquired. I imagine this creates various pressures.

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