Go, daddy, go: GoDaddy shares rocket 30% in value at IPO GoDaddy has had a successful launch at the New Stock Exchange on Wednesday morning with shares jumping more than 30 per cent, valuing the company at around $6bn. The company dominates the market for internet domain names with just over 30 per cent market share and offers a range of add-on services from security certificates to …
Been in it a while, but nobody listens to the grey dogs when there's a quick buck to be made at the expense of the pension funds that'll end up bearing the brunt of the crashes. Dotcomboomandbust2.0 was in full flow when instagram was overvalued at $1Bn, and that seems like chump change now compared to current overvaluations.
I despair
I wouldn't say it's the grey dogs being ignored. It's common sense, how can a company be worth so much money when it doesn't turn a profit. Amazon is a prime example of it. It's worth billions but has never in it's history turned a profit. Twitter is the same.
Greed is the ultimate driver in all of this. Software has two main costs, the time of the developers and the equipment to run it. Compared to a lot of other industry's the overheads are more simple and aren't that expensive really. So all of these VC's (scum of the Earth in all honesty) invest in a company they aren't doing it because it's a good product. They do it because they know it can be overvalued and they'll walk away with 10 times what they invested.
The losers in this will be the developers, the people who have jobs in this. The CEO's, the VC's, can just walk away shrug their shoulders. They don't care. But the ordinary Joe supporting a family will be out on their arse, trying to get a job in an industry that will be tanking until all the dead wood is killed off.
Lots of places are worth a fortune but don't turn any profit. The building I'm in at the moment would be worth several million on its own, and the private school within it has assets worth that again, and the ability to make money hand-over-fist all day long. The amount of money that goes through the place is phenomenal. But it's still a non-profit organisation.
And it's not like it's a SECRET that these places are not making a profit. You have to declare this to Companies House, the tax offices, etc. And every employee knows - probably more than most - what's happening inside the company.
What we have to stop is not people running companies that don't make profit, but people OVERVALUING said companies that make no profit. If you're making no profit, even if you are huge and expanding, then you don't have the safety barrier to get you through the harder times except for your own assets (think - if Amazon go bust, they have put all their money into their warehouses, datacentres, etc. which all have value and can be sold off).
It's when people pay billions for someone like Amazon, try to force it to turn profit by raising prices (i.e. ditching customers) and selling assets (thereby removing the last safety barrier) that you have a problem - those are the greedy ones, those are the ones destroying an established working company for personal profit, those are the ones who just look at the dollar-figure and ignore the consequences. Up until that point it's fine. Then it's a disaster which will usually end in bankruptcy and redundancies (if you're lucky!).
The people who have jobs in this know what they are doing. They're not stupid. If they stay when takeovers etc. emerge that look likely to profit from the venture, that's the dangerous part and that's when they can make stupid decisions (like "loyalty to the company" even though it's not the same company any more). Companies, and jobs, come and go. It's a fact of life, whether you're a 1970's miner or a 1990's web developer. What matters is how you predict and adapt to the situation. In the same way that cart-wheel designers can bitch all they want about the advent of the car, they saw it coming and chose their side and dealt with the consequences.
By comparison, some keyboard-changing drones at GoDaddy have more than enough information to make their decisions. If they choose to instead take shares, stay on, hope those shares will keep them into their old age etc. then that's their choice. Anyone worried about their future would consider things more carefully both ways and make a decision in their own interest.
Despite what people seem to believe, applying for other jobs WHILE WORKING is zero-risk. In fact, it's quite sensible to keep a hand in so you know what the market is like, what conditions / salaries elsewhere are like, etc.
The greed for this doesn't come from the original company (who ran it non-profit and thus took enormous risk of becoming "famous" enough to cash-in). It comes from any company taking it over to strip it of assets and force it into profit. And from employees who stay because they have been given shares, or whatever, in the company. Watch when the few smart ones leave. That's your cue. Hanging on "because it's a job" or because you have so much invested in it is your choice.
As always: the first round of layoffs means you're too late. You could have gone elsewhere, played off the good name of working for large company X, cashed in the overvalued shares you got, moved on to a rival. But you stayed and things didn't work out for you.
The people to hate are those that snap-up those companies, strip the millions of pounds worth of assets from them, run them into the ground, then bugger off to let someone else pick up the mess. They never did the work to build up those assets in the first place, and don't do the work to clean up afterwards, they just steal the assets and any profit that can be made in the short time they intend to be there. Pretty much Richard Gere in Pretty Woman.
(P.S. I have never owned shares in a company. I have worked for myself for years and for others for years. I have not been out-of-work for a day in my life. I have stacked shelves with toilet seats in B&Q at 3am on my birthday, but 99.99% of my employment has been IT and the rest was gap-filling. Honestly, I'm only a sort-of-average IT guy who can help 50% of the companies / organisations out there who have a below-average one. But I don't get the "evil corporation set up by someone who put in the hard work on the setup, ran a multi-million dollar company by staying scarily close to losing their money, job and reputation, and now wants to see some money back" mindset over the "destroy the company purely for personal gain" type, or even "little guy that was too dumb to spot the signs, cash out, and save himself from uncertainty over the YEARS he had to do that" guy.)
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Wow, the investment bankers and the company set a low price (no matter what they say publicly) and let their friends in at the low initial price so they can do a quick sell at the higher first day price and make a killing before the stock tanks. How is this different from other IPOs? The system is rigged against the common person as we can't get offering at the initial price.
Now, it'll be a surprise if it remains above the initial price for any sustained period of time.
Got an email from them a month or so ago saying they had disabled my account. When I contacted customer service, I was told that the credit card I had on record with them had expired. Well, yes, it had. Of course, they hadn't billed that card for anything since I left them three or four years ago. Danica may be the face of GoDaddy, but the brains are Curly, Moe, and Larry (or Shemp)
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