It is the wrong way to look at it. You have some kind of middle office risk experience or whatever that is looking at arbitrary metrics. Asset prices don’t actually work like that in public markets.
Agree with STL. I’ve been behind the scenes on a dozen or so IPO’s and management always wants to leave a little money on the table to create positive momentum in the shares. Keep in mind the fact that management almost always still has signficant holdings in the stock after the IPO, maybe not signficant to the market cap, but significant to them personally, and they want to see the value of those shares rise over time as they start to reduce their personal positions. Even existing shareholders who are not management want to see positive momentum in the stock, as they too continue to hold signficant positions post-IPO. An IPO is rarely a complete exit event for pre-IPO holders and it certainly wasn’t for FB, as only 15% of shares were sold in the IPO.
Point is recalculate your numbers taking out a time period that will never happen again. It’s skewed.
I didn’t know an IR is an “arbitrary metric.” I thought that was what asset management was all about. Sounds to me though at the age of 25 I was doing more than whatever you are doing now.
Okay, so let’s look at the last 12 years starting right after the tech bubble popped. Average first day return is 10.67%. That seems to fall nicely into my range of 5-15%. If we’re taking out whacky market conditions, let’s throw out 2008. The average moves up to 11.36%. (If you start at 1999 and include all years the average is 18.28%.) Feel free to do your own due diligence and double check.
Now if you want to argue expectations are trending down, I think that’s worth considering. Still, IPO investors need to be compensated for the risk they’re taking. Maybe 15% is too rich, but that’s a really good day. 5% isn’t enough to get excited about. 10% seems to be the sweet spot.
I don’t care what “asset management is about” – I’ve never worked at an AM firm and wouldn’t care to. The fact is that what you are talking about makes no logical sense in real world conditions. I can calculate all kinds of non-sensical metrics to try to argue various non-sensical points. It doesn’t matter. Asset prices do not have fixed and perfectly knowable values, even to underwriters, and therefore your “200% range” is a fallacy and an irrelevant metric to use to judge the success of an IPO. Sweep’s point is dead on.
Watch out Bromion! Blake did stuff in his masters program that would make your bitchass squirm. You don’t even want to know about it. You couldn’t sleep if you did.
When Blake was 25 he walked into a terrorist ambush. He watched all his friends die in a savage ways. RPGs, bullets, blood guts flying everywhere. He tried to save them, but he ran out of bullets taking out the rat bastards. Then the doorbell rang, “sweet pizza is here.” Blake turned off Counterstrike, ate the pizza and flogged the bishop to some Hentai.
I loved the unexpected twist at the end. I laughed until I had tears in my eyes.
flogged the bishop - i love it!
ChickenTikka - In all fairness, Counterstrike was incredibly awesome.
Joke all you want but Sheryl Sandberg is definitely an HCB.
hahaha
beautiful prose my man.
She’s a 6, to the limit a 7. No where close to making the prestigious HCB list
I very much agree under normal circumstances, but you’re forgetting a very important factor - the size of her bank account most definitely makes her a HCB, size does matter.
No dude you have to adjust her for age. She’s 40+, and should be judged in that context…But yeah I would be all over that.
Yep she’s just about the hottest chick on earth based on her bank account.
I’m sure someone at Ned Davis Research or a similar firm has done a study. It’s pretty simple.
Maybe one of you BSDs can give a call over there?
5-15% equals a 200% spread…wtf. So, if it was 40-70% then it would be a 75% spread? Maybe I should tell my investors that when the market returns 3% and we returnd 6% that they have earned a 100% spread…smooth marketing.
^^^ You can do whatever you want.
But it’s not a “spread” or I am not referring to a 5-15% return as a “spread.” It’s a confidence interval so you have to take into account standard deviation. Let’s say the mean is 10% and stand dev is 2%.
The distribution is probabaly normal. Take out the 90s and the mean comes down significantly as does the standard deviation. So the “range” comes down in the confidence interval. This isn’t rocket science, it is amazing to me how no one here can grasp this concept especially since the CFA program teaches statistics.
Unless someone puts up some numbers from a NDR or similar I’m done commenting here. The data exists so someone has done it.
Moron. People understand confidence intervals. What no one but you understands is wtf the significance of your 200% number is. To me, it looks like you took 5% and said that is 100% then said the spread is 200% because 5% goes into 10% twice. Idiot.