← pool · child of The IPO window reopens - but only at a real discount to 2021 marks
📈 Down-round IPOs wipe out the late-stage preference stack
Gurley's mechanism inside the reopening IPO window: hyper-competition in 2019-2021 stripped out the term that let investors protect their liquidation preference on an IPO, so when these unicorns list at a discount the late-stage preferred converts to common and the preference is simply washed. Brad sizes it at 50-70% down for the last Instacart round. Founders and early holders are the beneficiaries; the last private round is the loser, and going public becomes the cheapest way to clean an unfinanceable cap table.
0
CONVICTION
peaked 80.7 GREEN
DORMANT
band
▼ SHORT SFTBY
expression · bearish equities
MISS
outcome · R -10.3% · α -31.6%
2024-08-11
window closed
⚠ CONFLICTING IDEA ON THE SAME TICKER
— the board is arguing with itself; net it before trading (ticker view →)
also touching these tickers, same direction: Private equity model is broken 14 (BX) · Endowment liquidity crunch forces discounted private-equity secondaries 12 (BX)
⚖ Why this verdict
fully deterministic — evaluate.py replays this from daily closes; nothing below is editable or hand-set
- Window: 2023-08-11 → 2024-08-11 — first mention + 12-month horizon, then the window locks.
- The call: ▼ SHORT SFTBY (primary play). SFTBY rose 10.3% over the window → direction-adjusted R = -10.3% (the call lost money).
- Benchmark: holding SPY over the same window returned +21.3%
→ α = -10.3 − (+21.3) = -31.6%
— what this call made or lost against just owning the index. This is the number the verdict uses.
Stock-selection read: +10.9% — did SFTBY move the predicted way relative to the market. The two only differ on a SHORT: this call was right about direction relative to the index but still cost money versus holding it.
- Rule fired:
· HIT — R ≥ +10% AND α ≥ +5· PARTIAL — R ≥ +5% OR α ≥ 0▶ MISS — everything else
- Credit: supporters of a MISS earn 0 each, opposers the inverse — this feeds the scoreboard weights. supported: Bill Gurley, Brad Gerstner, Chamath, Jason, Sacks
Conviction timeline
bands: green ≥ 65 · watch ≥ 45 · ember ≥ 15
Plays vs SPY · % since first mention (2023-08-11)
Plays
| expression | symbol | kind | relevance | rationale |
|---|---|---|---|---|
| ▼ SHORT | SFTBY | stock | PRIMARY | archetypal late-stage preferred holder and the seller whose NAV rides on where its private book converts |
| ▼ SHORT | BX | stock | adjacent | private-capital manager carrying structured late-stage positions at preference-protected marks |
| ▼ SHORT | IPO | etf | adjacent | the down-round IPO cohort itself |
Mention log
BI
Bill Gurley
(regular guest ×1.0)
equities w=1.11 · n=9
· E141 (2023-08-11) · explicit_prediction · strength 3
▶ 52:32
SUPPORT
“because of hyper competition and investing in 99, 2020, 2021, there was a term removed from most term sheets that gave investors the right to protect their LICPREF on an IPO. That's gone in most of these cases. So you could convert LICPREF under, which for a founder or an early stage angel investor would be a huge win.”
Brad Gerstner
(regular guest ×1.0)
equities w=0.95 · n=22
· E141 (2023-08-11) · explicit_prediction · strength 3
▶ 55:47
SUPPORT
“if you were a investor in that last round of Instacart and you were buying preferred shares and thought you were protected, that preference is washed, right? So you're going to be down 50, 60, 70% on those preferred shares because you're going to be converted into common in that IPO.”
Sacks
equities w=0.89 · n=96
· E143 (2023-08-25) · explicit_prediction · strength 2
▶ 41:39
SUPPORT
“there are a lot of companies which have built up huge prep stacks because they raise too much money at the peak at valuations are too high. Going public does allow you to reset your whole prep stack because all the preferred with all the rights and preferences converts to common.”
Who built this conviction
each voice's total force on the score — supports and opposes from every mention, weighted exactly as the replay applied them · share = % of all mention-driven movement
⏳ decay drained -71.2 over the idea's life — that's time passing, attributed to no one
Score events
| episode | kind | Δ | after | note |
|---|---|---|---|---|
| E141 2023-08-11 | init | +46.7 | 46.7 | E141 born by Bill Gurley (explicit_prediction x3) [w=1.11] |
| E141 2023-08-11 | reinforce | +13.7 | 60.4 | E141 Brad Gerstner support x3 (new voice) [w=0.95] |
| E142 2023-08-18 | decay | -2.4 | 58.0 | E142 silent |
| E143 2023-08-25 | reinforce | +8.4 | 66.4 | E143 Sacks support x2 (new voice) [w=0.89] |
| E144 2023-09-01 | decay | -2.7 | 63.7 | E144 silent |
| E146 2023-09-22 | reinforce | +6.8 | 70.5 | E146 Chamath support x2 (new voice) [w=0.84] |
| E146 2023-09-22 | reinforce | +4.7 | 75.2 | E146 Sacks support x3 [w=0.89] |
| E146 2023-09-22 | reinforce | +5.4 | 80.7 | E146 Jason support x2 (new voice) [w=0.97] |
| E147 2023-09-29 | decay | -3.2 | 77.4 | E147 silent |
| E148 2023-10-07 | decay | -3.1 | 74.3 | E148 silent |
| E149 2023-10-13 | decay | -3.0 | 71.4 | E149 silent |
| E150 2023-10-20 | decay | -2.9 | 68.5 | E150 silent |
| E151 2023-10-27 | decay | -2.7 | 65.8 | E151 silent |
| E152 2023-11-03 | decay | -2.6 | 63.1 | E152 silent |
| E156 2023-12-08 | decay | -2.5 | 60.6 | E156 silent |
| E157 2023-12-16 | decay | -2.4 | 58.2 | E157 silent |
| E158 2023-12-23 | decay | -2.3 | 55.9 | E158 silent |
| E159 2023-12-29 | decay | -2.2 | 53.6 | E159 silent |
| E160 2024-01-06 | decay | -2.1 | 51.5 | E160 silent |
| E161 2024-01-13 | decay | -2.1 | 49.4 | E161 silent |
| E162 2024-01-19 | decay | -2.0 | 47.4 | E162 silent |
| E163 2024-01-26 | decay | -1.9 | 45.5 | E163 silent |
| E164 2024-02-02 | decay | -1.8 | 43.7 | E164 silent |
| E165 2024-02-09 | decay | -1.7 | 42.0 | E165 silent |
| E166 2024-02-16 | decay | -1.7 | 40.3 | E166 silent |
| E167 2024-02-23 | decay | -1.6 | 38.7 | E167 silent |
| E168 2024-03-01 | decay | -1.5 | 37.1 | E168 silent |
| E169 2024-03-08 | decay | -1.5 | 35.6 | E169 silent |
| E170 2024-03-15 | decay | -1.4 | 34.2 | E170 silent |
| E171 2024-03-22 | decay | -1.4 | 32.9 | E171 silent |
| E172 2024-03-29 | decay | -1.3 | 31.5 | E172 silent |
| E173 2024-04-05 | decay | -1.3 | 30.3 | E173 silent |
| E174 2024-04-12 | decay | -1.2 | 29.1 | E174 silent |
| E175 2024-04-19 | decay | -1.2 | 27.9 | E175 silent |
| E176 2024-04-26 | decay | -1.1 | 26.8 | E176 silent |
| E177 2024-05-03 | decay | -1.1 | 25.7 | E177 silent |
| E178 2024-05-10 | decay | -1.0 | 24.7 | E178 silent |
| E179 2024-05-17 | decay | -1.0 | 23.7 | E179 silent |
| E180 2024-05-24 | decay | -0.9 | 22.8 | E180 silent |
| E181 2024-05-31 | decay | -0.9 | 21.8 | E181 silent |
| E182 2024-06-07 | decay | -0.9 | 21.0 | E182 silent |
| E183 2024-06-14 | decay | -0.8 | 20.1 | E183 silent |
| E184 2024-06-20 | decay | -0.8 | 19.3 | E184 silent |
| E185 2024-06-29 | decay | -0.8 | 18.6 | E185 silent |
| E186 2024-07-04 | decay | -0.7 | 17.8 | E186 silent |
| E187 2024-07-12 | decay | -0.7 | 17.1 | E187 silent |
| E188 2024-07-19 | decay | -0.7 | 16.4 | E188 silent |
| E189 2024-07-26 | decay | -0.7 | 15.8 | E189 silent |
| E190 2024-08-02 | decay | -0.6 | 15.1 | E190 silent |
| E191 2024-08-09 | decay | -0.6 | 14.5 | E191 silent |