The summary of the conversation revolves around the performance of AT&T and ARM Holdings in the stock market. AT&T's shares are rising, with a cash flow expected to be in the range of $4.5 to $5 billion. The stock is 3% higher on the day. ARM Holdings' shares are jumping 25% in their NASDAQ debut. The conversation also discusses the potential for IPOs to jump-start the appetite for IPOs, with a guest suggesting that ARM could help in this regard.
The conversation then shifts to the topic of IPOs, with the guest disagreeing with the previous guest's view that the high will be hit at the IPO and then the company will just languish for a long time. The guest believes that there's real fundamental demand for IPOs, with people looking for the new toy. The guest also mentions that the ARM Holdings IPO is not a real IPO but a relisting of a company similar to Kendu, the J&J spin-off.
The conversation then moves on to the topic of Instacart, which is expected to be down 70% from the last private round. The guest believes that Instacart is pricing it to get into a good new normal for an upswing. The conversation then shifts to the topic of early-stage investors and the potential impact of the down 70% valuation on them.
The guest also mentions that many different types of companies, hedge funds, and people who are buyers of IPOs were buying in some of these growth rounds. The guest believes that this is a different dynamic than in past IPO cycles.
The conversation then shifts to the topic of Instacart's business model, with the guest mentioning that Instacart is doing the same thing that Amazon did, getting into the advertising business. The guest also mentions that Instacart is selling very low margin products in order to advertise against them, which has been a good model for supermarkets, Amazon, and Instacart going forward.
The conversation then shifts to the topic of market conditions that are good for IPOs, with the guest mentioning that the business is so tied to the ecosystem of the cell phone infrastructure that it's going to make sense. The guest also mentions that Instacart did $2.7 billion in revenue last year, about the same this year, and that today's close means $65 billion market cap.
1. AT&T's shares are rising, with the stock 3% higher on the day.
2. The expected cash flow for AT&T is in the range of $4.5 to $5 billion.
3. ARM Holdings' shares are jumping 25% in their NASDAQ debut.
4. The next guest believes ARM could help jump-start the appetite for IPOs.
5. The founder and partner at First Mark Capital, Rick Heitmann, disagrees with the guest's view that ARM's high will be hit basically at the IPO, and then it will just languish for a long time.
6. Heitmann believes there's real fundamental demand for IPOs, with people looking for the new toy.
7. He also points out that what's seen is a relisting of a company similar to Kendu, the J&J spin-off.
8. Heitmann believes that companies that have been around for a while and their valuations have been marked down dramatically bode well for them in terms of pricing.
9. He also mentions that if ARM would have traded down today, the market would have felt a lot differently.
10. Heitmann believes that ARM priced it the right way so they get a pop, and they also have a very small and limited flow.
11. Heitmann mentions that Instacart is going to be down 70% from the last private round, they're pricing it to get into a good new normal for an upswing.
12. Heitmann also mentions that Instacart is doing the same thing that Amazon did, selling very low margin products in order to advertise against them.
13. ARM did $2.7 billion in revenue last year, about the same this year.
14. Heitmann believes that today's close means $65 billion market cap-ish.
15. Heitmann believes that the business is so tied to the ecosystem of the cell phone infrastructure, it's going to make sense.
16. Heitmann believes that in terms of market conditions that are going to be good for IPOs, for the new round coming out, he's curious because big cap tech can be defensive, so that's not necessarily the measure of a good market or good market conditions for these IPOs.
17. Heitmann points out that people were very concerned that most of the rally has been around big cap tech, and where people had historically seen a market open is the last section of IPOs have rallied, right? All the IPOs from '21.
18. Heitmann believes that people would see them rallying just to show fundamental.