Venture capitalists and executives from more than 100 startups including Airbnb ...
SAN FRANCISCO - Venture capitalists and executives from more than 100 startups including Airbnb Inc and Poshmark gathered on Tuesday to bash traditional initial public offerings and promote direct stock exchange listings, according to two people who attended the meeting.
The lodging platform operator is considered a good candidate for a direct listing because it is already profitable and well known. Airbnb did not immediately comment. Advocates of direct listings, the route taken by Spotify Technology SA and Slack Technologies Inc, say they offer companies a better alternative to the traditional initial public offerings underwritten by investment banks.
But underpriced IPOs provide the company less capital and diminish valuations for early investors such as venture capital backers, and any investors or employee stockholders who sell in the offering do not realize full value for their stakes. “If in the first few days of trading it doubles because there’s all this retail sentiment ... and then it trickles down over the next two, three months, maybe even four months, then they probably priced the deal right,” said Golden.
Several venture capitalists cited conference video company Zoom as an example of under-pricing. Its stock jumped 70% on the first day of trading in April and is still trading at double its IPO price.
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