I'm looking at the S-1 for Pagerduty. It doesn't mention Y Combinator. Who/what entity represents Y Combinator in the shareholdings? Can we guesstimate their return?

https://www.sec.gov/Archives/edgar/data/1568100/000162828019...

S-1s only list >5% stockholders - you'll note that the co-founders have been diluted down to 7.1%. Y Combinator has definitely been diluted below that amount, that being said random back of the napkin (aka pulled from my ass) numbers for their share count is probably 700,000ish so their return is pretty damn good.

You won't see them in there because their percentage is too small to be listed (under 5%).

Just looked up Dropbox stock price. Not exactly pretty. This is not the 90s when the retail investor could make money from tech stocks. SNAP is bad, Dropbox doesn't look good. Neither does Lyft.

On Dropbox, for context when a tech company IPOs there are typically "ratchets" in place that prevent all shareholders from selling stock right away, so initial investors, founders, and employees often each have their own 'hold off' time that can be anywhere from 3 months to a year.

Because of this dynamic, the stock price of the company a year after they IPO is a really interesting indicator of the 'retained' value of the company. Which is to say after anyone who has a big chunk of the company could sell (and that drives down the price) versus how many people are selling. This is where the float is maximized so the stock price is more closely tied to the market value rather than a scarcity value.

Dropbox's performance has been pretty solid in this regard, especially compared to things like GroupOn or Zynga (notable problem children) or SNAP (current poster child).

I don't own any DBX that I'm aware of (I may through an aggregated ETF so for the pedantic folks I leave that disclaimer in) but it wouldn't seem to be a "bad" investment for holding.

Are you mixing up “ratchets” with “lockup periods”? Ratchets are guarantees for investors that IPO prices hit a certain value other wise they get trued up by a certain amount. This happened to Square for their IPO.

Yes, I was thinking about lock ups.

SQ up 5.8x since Nov 2015

TEAM up 4.1x since Dec 2015

TWLO up 4.7x since Jun 2016

SHOP up 7.4x since May 2015

OKTA up 4x since Apr 2017

ZS up 2x since Mar 2018

Retail investors can definitely still make money.

400% more than alpha in fact:

https://www.bvp.com/bvp-nasdaq-emerging-cloud-index

(granted not all of those are IPOs in the last decade)

When you look at these results, it doesn't seem too risky to invest in a tech IPO, especially if the company "makes sense" [1]. These companies sound like solid businesses: Atlassian, Shopify, Square, Twilio.

This metric would have probably excluded Facebook, Twitter, Snapchat, and Lyft. I think Uber will also be a gamble. But PagerDuty seems like a solid company that will do well, and a far less risky investment than a social / ridesharing service.

Can anyone point out cases where a "reasonable" [1] company ended up underperforming or crashing a few years after an IPO?

[1] E.g. HN comments are generally positive, instead of "this is ridiculous".

How does the IPO works in US? Do retail investors get to subscribe to the IPO shares before the listing date? Or the retails investors can only "buy" the shares once they start trading on the exchanges?

> Do retail investors get to subscribe to the IPO shares before the listing date?

Generally no, especially if it's in high demand. My broker allows retail investors to place bids if they have over $250k in their account and agree, as a condition of having access to future IPOs, not to sell within 30 days. However there's still no guarantee of having your order filled.

The prices I quoted were from the first day of trading, not the IPO.

Which brokerage is this?

TD Ameritrade. You can either have 250k in your account or 30+ trades in the past 3 months. You'll need to fill out FINRA Form 5130.

MongoDB is another I believe

SNAP is up 105% YTD.

I wouldn't discount that company yet. Their market cap is actually fairly well priced right now, and I'd wager they are under-valued (assuming they execute well over next 6 months).

I see less and less people using it though (I've long since uninstalled) at least for my generation (30s). Unless it's still very very in with the younger crowd, I don't think it will do well long term.

Calling in from the 20s crowd. It's been years since anyone I know cared about snap. If it's not on Instagram, it didn't happen.

And I don't think the 40+ crowd is using it either. So it means either teens are using, or snapchat is on borrowed time.

Hasn't the userbase of snap always been teenagers sharing naked pictures with each other?

That was literally maybe for the first year or two. Since 2013 or so that's definitely NOT been the case.

My VGT holdings have been doing well. https://investor.vanguard.com/etf/profile/VGT

Ya, tech is one of the strongest performing sectors in the last decade.

There are plenty of gains to be had. I'm up 400% on FB, I'm up 200%+ on TWLO, HUBS, MU. I'm over 100% on PYPL, AMD.

I am down 5% on DBX.

and for a whole year of being public, dropbox kept dropping and now is 30% less than its IPO price.

Dropbox's "IPO price" was technically $21. It opened at $29, though so perhaps that's what you mean?

Just second?