Weekly Update #175: Winners, losers, gainers, laggards
Not too long ago, as markets were preparing for uncertainly leading up to the U.S. election, we wrote a blog post about The Pre-IPO Investment Opportunity in an Up Market. Now, we are starting to see the impact of uncertainly following the election.
On IPO Markets:
- AppDynamics postpones planned December IPO until next year, the Wall Street Journal reports
- Yet Snap (formerly known as Snapchat) looks to be moving forward with plans to IPO in early 2017
In private markets:
- Sound the “down round” alerts: Uber rival Ola is reportedly accepting fresh funding at a lower valuation
- Meanwhile, Monday saw a big “up round” announcement with Stripe doubling its valuation after taking in $150 million in new capital
What should be made of the dichotomy here? In any robust market, there are winners and losers, gainers and laggards. Generally speaking, investors prefer normal market environments when valuation changes and liquidity dynamics are driven by company fundamentals, as opposed to macroeconomic or technical factors. In pre-IPO tech, this still seems to be the case. AppDynamics is still planning to go public in 2017. Snap is the buzziest IPO name since Facebook. Ola is facing competitive challenges and, by comparison, doing less than half the business of a similar company (albeit in a different region) in Lyft. Stripe is growing faster than public competitor Square. In the weeks ahead, we’ll keep an eye on whether fundamentals continue to drive markets.
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