If AI business is greatest business ever, why are they doing IPO?
2 pointsby OnuRC7 hours ago4 comments
  • Jblx27 hours ago
    - Risk mitigation. Even if you are 90% sure that things will go up and to the right, it still might make sense to cash out a bit as insurance. Especially if you aren't giving up any control

    - Buying allies. If you make a lot of other people rich, they will probably become your biggest boosters. Might not be a bad idea to have some rich allies rooting for you. And you might need some political favors in the future.

    • FloorEgg7 hours ago
      Also it's a race, with theoretically exponentially compounding gains to the winner(s). So trading 10% dilution for capital that will exponentially compound, may mean that e.g. a 10% dilution now results in 50% greater market cap in 5-10 years, or 10% dilution now means the difference between winning or coming in 4th, which could be a 10x or 100x difference in market cap.
  • rawgabbit2 hours ago
    Pump and dump and move to Argentina.
  • ungreased06757 hours ago
    I believe the music will stop soon, and people are cashing in.
  • zhoBEENG7 hours ago
    The current astronomical valuations push even those people with the highest risk tolerances toward diversifying. Even if you assume with 100% certainty that the AI sector will be the end-game of capitalism, you can't assume that your company will succeed. Better to hedge your bets and sell part of your company, buying shares in all your competitors with the proceeds.

    Using a dual class stock structure, you could even retain complete control of your own company while gaining partial or complete control of others with the proceeds of the IPO. My understanding is that private companies usually don't have dual class share structures until they are preparing to IPO. By IPOing in this manner, you are giving patronage to the investing public without ceding control of the company's assets and operations, in exchange for a boatload of cash right now.