Why everyone wants to go public right now

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Hello! This week: Why everyone's going public right now, what we've learned from the S-1s, and Akamai's CFO tells us his favorite Excel trick.
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So much for a quiet August. This week saw a ton of big-name tech filings, with everyone from Snowflake to Palantir disclosing their financials ahead of their listings. We'll get to the S-1s themselves shortly, but first an important question: Why now?
For one thing, Labor Day. "There is a 15-day period from the time a company publicly files its S-1 to when it can commence a road show," Wilson Sonsini partner Mark Baudler told me. "Filing publicly this week will enable those companies to commence a roadshow after Labor Day." Citi's co-head of North America equity capital markets, Paul Abrahimzadeh, agreed.
But there's more to it than just a three-day weekend. Despite economic turmoil, the markets are reaching record highs, so "there's a lot of optimism" right now, Nasdaq's head of capital markets, Jay Heller, told me. Companies that had started the capital-raising process earlier this year are now "looking to accelerate" their plans, he added.
And there's risk in leaving it too late, too, Moorhead thinks. "There is some fear that if a Biden-Harris ticket wins the election, tech company values will plummet, so timing is of the essence," he said. Heller echoed that, saying that there's always a "cat and mouse game" in election years. That could lead to an IPO slowdown in November, depending on the election result.
For now, though, don't expect a breather. "Post Labor Day, I think the wheels come off again," Heller said. "I think it's going to be really, really busy." Better rest up, then.
Stronger care … from anywhere, to anywhere
A strong healthcare system can scale to meet increasing patient demands. At Philips, we're charting a new way forward by moving care beyond the hospital's walls with advanced virtual health capabilities that expand clinical reach and increase care team capacity.
So what have we actually learned from all the filings? An awful lot. On Protocol, David Pierce ran through Snowflake, Unity, Asana, Amwell, JFrog and Sumo Logic's prospectuses, and you should have received our special reports on Ant and Palantir earlier this week.
But perhaps the biggest takeaway is that all the companies share some major risks in common. Much of that was neatly encapsulated in Unity's S-1, where the risk factors section read like some kind of greatest hits of challenges facing all modern tech companies.
We'll see in the coming weeks whether investors are willing to tolerate these risks. Given the current state of markets and tech stocks, I'd be amazed if they aren't — which makes you wonder if there's anything they won't tolerate?
What's one thing people didn't pay enough attention to this week?
The U.S. dollar. The move lower in the U.S. dollar since the end of May has been pretty significant, something any company with operations outside the U.S. should pay close attention to.
What's your favorite Excel trick?
Goal Seek. Using Goal Seek, Excel can quickly help determine a variable in a formula when you know the desired result of the formula but are not sure of all the inputs (e.g. determining an interest rate when you know the payments, loan amount and term but not the rate).
What tech stock do you have your eye on?
None at the moment. Valuations in general look stretched, especially when you see companies that are losing money and trading at 20+x sales.
What's been your worst financial decision?
I bought Lehman Brothers stock the weekend before the government decided not to back them. I was betting on the government bailing them out. And we know how that turned out.
What was the most overlooked or overhyped deal of the last 12 months?
Overhyped: Some recent tech IPOs that are trading at crazy valuations.
Overlooked: What is happening with some of the financing in investment grade credit, specifically. There is some amazing long-term straight debt financing being closed at rates in the 1 to 2% range.
Stronger care … from anywhere, to anywhere
A strong healthcare system can scale to meet increasing patient demands. At Philips, we're charting a new way forward by moving care beyond the hospital's walls with advanced virtual health capabilities that expand clinical reach and increase care team capacity.
Thoughts/feedback/tips? Email me — shakeel@protocol.com — or tips@protocol.com. And subscribe to get Index in your inbox every week. Thanks for reading — have a great weekend, and see you next week.
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