E29: Coinbase goes public, direct listings vs. IPOs, unions & more with Bestie Guestie Brad Gerstner
2021-04-17 spoken.md · speaker-labeled ▶ watch ← E28 all episodes E30 →
Every number here is replayed from score_events — the same ledger the pool ranks on. Decay is what the 30 ideas nobody mentioned gave up this week; it applies only when an episode is processed.
Tier crossings
conviction thresholds crossed by this episode — 65 / 45 / 15 · ideas born here show where they landed. why 65 isn't always green
Who moved the board
each voice's force on conviction this episode — supports and opposes, weighted exactly as the replay applied them · share = % of this episode's movement
What got argued (8 ideas)
ordered by how hard each idea moved · quotes are verbatim from the transcript, timestamps deep-link into the episode
The secular trend in technology has never been more potent; an index of the world's best technology companies held five to ten years is the most asymmetric bet in investing, and it is a simultaneous truth alongside near-term multiple compression.
I believe that if you own an index of the top 30% of technology companies in the world today and you're willing to hold them for five to 10 years, you will be incredibly well rewarded.
Long rates normalizing toward pre-COVID levels re-rates long-duration growth assets downward; software/internet multiples already gave back 30-40% off the Oct-Nov 2020 peak and have another 10-20% to go, with the largest public growth managers deleveraging rather than adding.
You can believe the next three months that we're likely to have more multiple compression in the public markets, right? You could hedge your public book in a variety of ways against that, like we did and announced last December.
Direct listings clear at their highest price on the open print and grind one-way down from there (Spotify languished two years, Slack until the Salesforce bid), so shareholders receiving distributed stock should sell immediately rather than trickle out.
I think the price action on direct listings shows you that you top tick the top price at the moment on the open print. And so, you know, if you're going to sell, you're probably better off selling absolutely right away. And if you look at the price action on direct listings, it's basically been one way direction down from the point of the direct listing.
The truth of the matter is Chamath is pioneering here. And I think it's been incredible to watch the competition in choice. And as Chamath knows, I participated in a couple of the deals that he's done.
Vaccinated consumers will underwrite their own risk and refuse further lockdowns; pent-up demand for travel surges hard enough that operators are battening down the hatches for it.
Chesky went on CNBC this morning and basically said they are battening down all the hatches because there's no... The demand for travel is literally going to blow the roof off the building.
Prime saves the average member roughly $630 a year across 200M members, about $126B of annual consumer value created, so Amazon's market cap is only ~13x one year of the savings it delivers to customers — a cheap multiple on the value it creates.
when we normalize, there's no reason that the 10 year shouldn't be back at the level it was in January 20 ... for every 1% move in the 10 year, you've got a 10 to a 20% drawdown in growth multiples
Episode digest
written during extraction and stored in data/extractions/ep029.json — the auditable source of truth, including everything market-adjacent that did not earn a capture
LABEL ANOMALY FIRST, because it governs every attribution in this file: Brad Gerstner does have his own label (27 turns), so the E284-style guest-merge did NOT happen here — but the episode carries a full-file Chamath<->Friedberg label SWAP, the E239 failure mode. Receipts: at 1:00:04 and again at 1:01:07 Jason asks 'Friedberg, do you think...' / 'You agree with that, Friedberg?' and both answers are labeled Chamath; at 1:01:51 a turn labeled Friedberg says 'What's the upper bound Friedberg of...'; the 31:01 turn labeled Friedberg says 'the early venture funds of Social Capital' and names the Broad and Mayo as its LPs; the 22:37 turn labeled Friedberg poses 'a question to Friedberg and Sacks and Jason'; the 5:21 turn labeled Chamath says 'But Chamath, you had a point of view'; and Brad at 6:39 says 'I totally agree with Chamath. Lockups are one of the most insidious things,' confirming the 5:40 lockup rant labeled Friedberg is Chamath. Jason, Sacks and Brad labels check out clean. Every Chamath/Friedberg attribution below is therefore taken from content, not labels: worth an audio spot-check at 3:45 (Ribbit/Slack direct-listing turn) and 33:25 (the Bezos-letter Amazon turn, which Jason explicitly calls 'Chamath's tweet'). MARKET CONTENT: this is a Brad Gerstner episode and he is the whole signal. His central call — made on the record and with disclosed money behind it — is that long rates normalizing back toward Jan-2020 levels compress long-duration growth multiples 10-20% per 1% move on the 10-year, that software/internet already gave back 30-40% off the Oct-Nov 2020 peak, that there is another 10-20% to go over the next three months, and that Altimeter hedged its public book last December. He backs it with primary-source color from a roadshow: every big public growth PM he just met is deleveraging growth, none are adding, and the anchoring crowd waiting for Zoom to snap back to $500 is wrong because 500 was the all-time-high multiple event and any return has to come through earnings. That rate-normalization argument also cuts directly against the still-open E007 'Fed at zero for half a decade, get paid to be long equities' thesis, logged here as an oppose. Held simultaneously — his words, 'you can hold simultaneous truths' — is the long side: own an index of the top 30% of global technology companies for five to ten years and you get the most asymmetric bet in the history of investing, with Snowflake as the archetype where it did not matter whether you bought the $100M round or the $1B round. The direct-listing debate produced the sharpest tradeable claim of the episode from Chamath: direct listings top-tick on the open print and grind one-way down (Spotify languished two years, Slack until the Salesforce bid), he says his own Slack distribution strategy of trickling out was a mistake, and the operative rule is sell the moment you are distributed. He disclosed being one of Micky Malka's largest Ribbit LPs and being distributed all of his Coinbase yesterday. That is effectively a bearish COIN call three days after the largest direct listing ever, and it is scorable. Brad corroborated the broader new-issue weakness from the IPO side — private marks now sit above public clearing prices, Deliveroo broke 30% and AppLovin 20% in their IPOs — but that private-vs-public inversion has no clean listed instrument so it is not a separate idea. Brad also logged positioning on the still-open SPAC-complex thesis: he participated in several of Chamath's deals, sponsors what the besties call the largest SPAC in the world, sponsored Roblox's direct listing, and took Grab out this week claiming a 20-30% better price than a bank would have printed, a third of the share base unlocked on day one, and over $1B of indirect cost savings versus a traditional IPO. Chamath's Bezos-letter riff produced the one long-side single-name view: Prime saves ~$630/member/year across 200M members, ~$126B of annual consumer value, so Amazon trades at ~13x one year of the savings it delivers — 'exceptionally cheap.' Brad relayed Chesky's CNBC line that travel demand is going to blow the roof off and endorsed it with a lockdown-mutiny argument; captured at sentiment strength 2 because the demand claim is Chesky's, not his. NOT CAPTURED, deliberately: crypto. Despite Coinbase being the entire news peg, nobody made a forward instrument-backed BTC/ETH claim — Sacks' 20k-to-3k and 'obviously a great time to buy Bitcoin' is retrospective, Brad's 21.co/Bitcoin-at-$1,100 story is a self-flagellating post-mortem about mental inflexibility after Katie Haun told him those shares became Coinbase stock, and Friedberg's Dogecoin stimulus-check line is a joke. So this file has a COIN-equity idea and zero crypto ideas, which is the correct split. Also not captured: the entire Bessemer/Alabama union block (1,798 to 738 against) produced a lot of capitalism-defense rhetoric from Brad, unions-2.0 collective-bargaining reform from Chamath, and vocal-minority framing from Friedberg, but nobody tied it to Amazon margins or any other price — no market edge, no capture. Same for Sacks' Hawley $100B M&A-ban read ('this legislation is not meant to become law'), skipped as consensus, and the California-vs-Texas/Florida federalism A-B test, skipped for lack of an instrument. Reinforced on the existing board: covid-normalcy-summer-2021 got pulled both ways in the same episode — Sacks says the economy is booming again and Covid is over inside five or six months, Friedberg says Covid never goes to zero and we are shifting to a new normal lasting many years.