The New IPO Path - Etsy Goes Public

Steve Kanaval |

Etsy.jpgEtsy will soon be a public company, and the peer-to-peer e-commerce website is looking pretty cool, selling everything from knit hats to vintage jewelry. Etsy is the online version of every craft show you have ever been to in a local gymnasium or on the street corner over the summer with a guy sitting on a folding chair with his dog and a station wagon backed up to the edge of his tent.
In fact, there are many things different about the way Etsy will go public than previous popular online companies.

I recall sitting in the conference room in the late 90s, listening to another IPO candidate talk about the potential revenues of the online B2B platform, and all I was thinking about was the salad, because this was the third company in a row. I could tell that the CEO/CFO team had been up and down California St. in San Francisco, and we were their last chance. Because Montgomery Asset or Robertson Stephens were unlikely to accept them, we would accept them, and I would wind up trading the opening shoe.

A Brave New World for Tech IPOs

Things are very different in 2015, because Venture Capital now trades shares of private companies in an orderly fashion via companies like Sharespost. It was not like this twenty years ago, when we seemingly backed our station wagons up to the edge of their tent, and Montgomery Asset and Robbie Stephens are long gone, but the markets are very efficient on the back of Facebook, Inc. ($FB) and others going this new IPO route. In fact, anyone can trade shares prior to IPO, where previously, you had to know someone like Frank Quattrone of First Boston, an American technology-focused investment banker who started technology sector franchises at Morgan Stanley  (MS) , Deutsche Bank  (DB) , and Credit Suisse First Boston  (CS) . He helped bring dozens of technology companies public during the 1990s tech boom, including Netscape, Cisco Systems, Inc.  (CSCO) , and Amazon.com, Inc.  (AMZN) .

Later, he was prosecuted for interfering with a government probe into Credit Suisse First Boston's behavior in allocating "hot" IPOs. The case was eventually dropped. He was earning roughly $120 million a year during his peak at the firm. There are no more “Friends of Frank” in 2015, just good ideas going public...and Etsy will raise $100 million as one of the hottest IPOs so far this year.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
FB Facebook Inc. 117.43 2.03 1.76 20,199,190
MS Morgan Stanley 42.09 0.26 0.62 12,264,084
AMZN Amazon.com Inc. 759.36 19.02 2.57 4,313,532
DB Deutsche Bank AG 16.66 0.92 5.85 11,916,526
CSCO Cisco Systems Inc. 29.53 0.28 0.96 20,865,842

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