Peter Rojas & Iain Thomson talk IPOs, founder pressure for liquidity, dangers of selling too early

TL;DR

The lock-up expiration for companies like Snap and Blue Apron can significantly impact their stock performance, leading to potential buying or selling opportunities for investors.

Transcript

they're frustrated yeah a lot of them they are some of them are being more being I'd say patient reasonably patient around these but there is pressure for liquidity events yeah and and i think that i mean we're me again where i'm a my fund is very young so we're not we have no potential IPO candidates right now but hopefully will someday yeah but t... Read More

Key Insights

• ⏰ Lock-up expirations can create buying or selling opportunities for investors, depending on the company's performance and market conditions.
• 👤 Snap's declining revenue and user growth, combined with Instagram's dominance, make it a risky investment before the lock-up expiration.
• 🤨 Blue Apron's underperformance since its IPO raises concerns about its future prospects and potential impact of the lock-up expiration.

Questions & Answers

Q: What is a lock-up expiration, and why is it significant for investors?

A lock-up expiration refers to the end of a period during which certain shareholders are restricted from selling their shares. It is significant because it can lead to a flood of new shares hitting the market, potentially causing a decline in stock price.

Q: Should investors buy or sell Snap shares before the lock-up expiration?

It depends on the investor's risk appetite and belief in Snap's future prospects. The declining revenue and user growth, coupled with competition from Instagram, make it a risky investment. It may be wise to wait until after the lock-up expiration to make a decision.

Q: What other companies should investors be cautious about in terms of lock-up expirations?

Blue Apron is another company that investors should keep an eye on. It has underperformed since its IPO, and the current market conditions may further impact its stock performance. It's essential to assess the company's financials and future prospects before making an investment decision.

Q: How can investors determine if a lock-up expiration will impact a company's stock performance?

Investors should consider factors such as declining revenue, user growth, competition, and the company's ability to meet investor expectations. Analyzing the company's financials and monitoring market sentiment can help assess the potential impact of a lock-up expiration.

Summary & Key Takeaways

• Lock-up expirations put pressure on companies to provide liquidity events for investors, which can lead to frustration among shareholders.

• Snap's declining revenue and user growth, coupled with Instagram's dominance, make it a risky investment for shareholders.

• Blue Apron has underperformed since its IPO, and investor fear is growing around businesses with high customer acquisition costs.