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Serious question: Why does the Hacker News crowd seem to be so cynical about big tech IPOs? Considering for most startups this is the dream, why aren't there more congratulatory high fives? Is it just a case of jealousy?

This IPO is going really well. The stock is being well received in the marketplace. I know twitter employees who just got rich are reading this, but can't comment due to SEC rules, so congrats Twitter peeps!

I think it's a bad sign when you see a company as dramatically overvalued as Twitter is. The primary function of stock markets is capital allocation, i.e. directing capital to companies that can provides the greatest return. When you see an IPO like TWTR today, that's not a sign of rational and efficient capital allocation; it's a sign of speculation gone wild.

Why is this bad? It can cause a couple of negative effects:

(1) Good companies that deserve the attention of investors may be starved of capital while billions of dollars gets directed to flashy overvalued companies.

(2) If it turns out to be another bubble, investors will feel burned and they'll become more risk adverse in the future. Investors will be reluctant to provide capital to companies that can make good use of it.

Twitter just made more money from selling stock than they have ever earned in revenue in their lifetime. Something is seriously wrong when companies start making more money from selling stock than they do from selling products or services.

Let me tell you about a billion dollar company. The company is called Loudeye. It had a huge IPO party in Seattle with bands, a James Bond theme etc., gifts for each guest. The IPO price was $16, it soared the first day to $40. The market cap at the end of the day was $1.4 billion. They had 200 employees, $2.7 million in revenues, but had losses in the millions.

They IPO'd in mid-March 2000. The tech market almost immediately began collapsing the next day.

The founder used to give interviews during the so-called quiet period. A shareholder class action lawsuit argued the prospectus was false and misleading.

They sold to Nokia for $60 million in 2006. $60 million, not $1400 million.

I guess people remember the last time around when companies losing money instead of making money IPO'd.

On an individual level, it's hard to predict if Twitter will do well or not, but on a general level it's safe to say that companies large enough to IPO are generally safer when they're making money as opposed to losing money.

Advertising platform + Web does not equal "tech company". I've never really been excited about Twitter's tech, since it's mostly just inverted IRC. You "join" people, rather than channels. And channels become hashtags. Then they centralized the entire thing and put a dot-com face on it all. The only way Twitter makes money is by buying out or eliminating competitors, mostly mobile apps. Any high fives for getting crushed by Twitter?

So the tech isn't interesting, nor is the business. The interesting part here is what people are willing to pay for it.

The whole point of Twitter was you could tweet from an SMS wasn't it? SMS was supposed to be the primary platform...

Probably the easier startup lottery these days could be join a startup that is rumored to be an IPO. I'm not sure if software engineers get to make millions, but even 500K to 1M vested over 4 years is pretty good.

It's a hangover from the dot-com bubble.

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