I recently sense a certain desperation from the large big money funded start-ups. In the last two weeks, I have received $150 in free rides from Lyft and $50 in free food from Sprig. I have been a Lyft user since 2013, and a Sprig user since 2014, using them less and less, but I have never received such a generous credit before.
I'm not 100% sure this is what's happening, but thought I'd share my experience: I used to work at a hedge fund that sometimes held stakes in private companies. Every year, we would have to mark the stakes to market. However, we could not do the valuation ourselves; the valuation was done by 3rd party auditors. And these 3rd party auditors usually have no idea what they are doing. Even if they are Big 4 auditors and the stakes are large :/
A few takeaways:<p>- Morgan owns a small percentage of Palantir, maybe 20 basic points. However, this is big as Morgan and the big i-banks still have a lot of influence on the big money funds. This will scare the LPs off and VC funding will dry up.<p>- In my opinion, Palantir is still too expensive at ~15B valuation. I mean how can it be more expensive than both Tableau, Splunk and Hortonworks combined in the public market?<p>- Dropbox seems to be hit the hardest when T. Rowe Price marked it down to just 5B valuation. Still a great outcome if they can exit at the price point, but it sucks for the late investors and recent employees.
How much of Morgan Stanley's business is from Primerica, the deceptive MLM company? Primerica bought Smith Barney in 1987 whicu used egregious marketing tactics to build its business. Then Morgan eventually bought them.<p>If anything, I'd downgrade Morgan Stanley's stock. They were recently fined $3.2 billion for crimes causing the financial crisis. That news broke 1-2 days after Morgan dropped nearly 7%.
No surprise here. As with a lot of these multi-billion dollar valuations there really wasn't a lot supporting the valuations apart from hype and promises of future growth and solid finances. Now that those things aren't panning out there's nowhere to go but down.
Sorry if this is off the topic of Palantir's and Dropbox's diminishing valuations:<p>I would like to see pushback by consumers against very large Internet companies and corporations in general. Even though some businesses need to be large for economy of scale, I think of non-local businesses as parasites. When local goods and services are not directly exchanged then some remote business entity is sucking off profit.<p>It seems like huge valuations are all part of a rigged game in much the same way as the military industrial complex and mega sized corporations are rigged games. Except for pushing back as a consumer to prefer smaller and local businesses, I am not sure what else to do.
What happens after these markdowns to the employees hired in the last 12 months? Presumably their options are now underwater and they have little reason to stay anymore. Will these markdowns lead to a sizable exodus from the companies?