IPO Rundown With Aaron Dillon, Why the Bull Market Isn’t Finished Going Up
Sep 5, 2023
01:38:39
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IPO market expert, Aaron Dillon, joins the podcast to discuss the current IPO landscape and market expectations. They analyze Instacart's revenue model, potential IPO, and Klaviyo's shift to profitability. The conversation also covers text messaging services for corporations, market corrections, bullish sentiment, private market regulations, fraudulent practices in pandemic relief money, and upcoming episodes.
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Quick takeaways
IPO market is gradually recovering after a freeze, signaling a return to normal business and risk appetite.
AG Dillon and Co provides access to pre-IPO venture-backed startups, offering potential investment opportunities in high-growth companies.
Valuations of pre-IPO stocks have adjusted to market expectations, following recent primary financing rounds and adjustments in the tech market.
SoftBank's arm holdings preparing for an IPO, presenting a crucial opportunity for liquidity and returns while navigating a changing investment landscape.
Deep dives
The Importance of IPOs and the Gradual Resurgence of the IPO Market
IPOs are seen as a signifier of a return to normal business and risk appetite, with the IPO market gradually recovering after a freeze during the past 18 months. Key companies approaching IPOs include Clavio, Arm Holdings, Instacart, SpaceX, and Starlink. The IPO market is expected to boost investor enthusiasm, although caution is advised to avoid excessive market activity. Overall, the market is gradually tip-toeing back, offering potential opportunities and insights into valuations, players, and future prospects for investors in the public market.
Access to Venture-Backed Startups and the Role of AG Dillon and Co
AG Dillon and Co, founded by Aaron Dillon, provides access to venture-backed startups in the pre-IPO market for independent wealth management firms. The company offers investment opportunities in the secondary market and dedicated funds, aiming to provide exposure to high-growth companies. Recent fundraising in venture capital-backed companies, such as SpaceX and OpenAI, demonstrates the potential for investment in well-established companies with significant valuations and growth potential. The unique background of Aaron Dillon, combining tech experience, ETF knowledge, and wealth management expertise, contributes to AG Dillon and Co's appeal among various constituencies.
The Status of the Pre-IPO Venture-Backed Startup Market
The pre-IPO venture-backed startup market experienced a pullback, further exacerbated by the overall tech market decline that occurred in 2022. While pre-IPO stocks pulled back, they have not rebounded to the same extent as the public tech market. However, recent primary financing rounds have adjusted valuations of pre-IPOs to market expectations. Notably, companies such as Stripe, Klarna, and Etoro, which recently raised money, have experienced valuation adjustments. Additionally, pre-IPO stocks typically follow a multiple-round investment process, with valuations varying according to the level of funding and market perception. It remains to be seen how upcoming IPOs will fare in the public market.
The Arm Holdings IPO and SoftBank's Strategic Moves
SoftBank's arm holdings is preparing for an IPO after its previous attempt to sell to NVIDIA faced regulatory challenges. The IPO should provide liquidity for SoftBank, which needs capital for its vision fund and overall financial obligations. The valuation is set around $52 billion, although concerns persist due to lower recent financial performance. Arm Holdings has maintained its 200-day average, indicating potential support and demonstrating its role as a significant player in the semiconductor industry. The IPO is a crucial opportunity for SoftBank to generate returns and address liquidity needs while navigating a changing investment landscape.
Energy stocks are performing well
Energy stocks have been the best performing sector in the market, outperforming the S&P 500 and showing strong momentum. Crude oil prices have been rising and energy stocks have been breaking out. This presents an opportunity for investors to consider investing in the energy sector.
Recession calls are declining
Fewer companies are mentioning the possibility of a recession in their earnings calls, indicating a decrease in concern. The number of S&P 500 companies citing a recession has been decreasing over the past few quarters. This may suggest that the risk of a recession has diminished, but it's always important to monitor economic indicators closely.
Warren Buffett's birthday and the success of his company
Warren Buffett recently celebrated his birthday and his company, Berkshire Hathaway, has reached a market cap of over $786 billion. The company's book value has been growing at a steady rate, reflecting its success and the value it provides to shareholders. Despite Buffett's shift away from focusing on book value, the company's performance continues to be impressive.
On this TCAF Tuesday, Aaron Dillon joins Downtown Josh Brown to discuss what's going on in the IPO market. Then, join Josh and Michael for an all-new episode of What Are Your Thoughts and see what they have to say about the biggest topics in investing and finance! On this episode they discuss: seasonal corrections, SEC vs private capital, the ERC bubble, recession mentions, and much more!
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