"ipo" entries

An IPO by any other name

Going public with a special ticker symbol, and the companies that went before.

Times Square - NASDAQ by luisvilla, on FlickrWhen Tableau goes public this summer, its shares will trade on NASDAQ under the apt ticker symbol “DATA.” Tickers are arguably less important now than they’ve ever been, since computers have removed much of the ambiguity they’re meant to resolve, but an interesting ticker symbol always stirs my fascination with corporate archaeology.

Some executives see prestige in quirky ticker symbols, or those that are just one letter long, and the exchanges take advantage of that to attract listings. It was rumored, for instance, that the New York Stock Exchange was reserving “M” and “I” for Microsoft and Intel, respectively, should they ever decide to ditch NASDAQ, and it finally gave up M in 2007 when Federated Department Stores re-listed itself as Macy’s. Since then, the exchanges have fallen over themselves to list tech companies, and NASDAQ and the New York Stock Exchange have handed over “Z” to Zillow and “P” to Pandora.

But the list of single-letter ticker symbols is strikingly Ozymandian. Two letters ahead of Zillow, and only about 43% larger by valuation, is United States Steel, the biggest corporation in the world at its founding by J.P. Morgan in 1901, but marginal enough 90 years later that it was removed from the Dow Jones Industrial Average.

At “Y” on the New York Stock Exchange is Alleghany Corp., today a smallish insurance firm, but at one time a swashbuckling holding company that controlled almost a fifth of the U.S. railway network, including the Chesapeake & Ohio and the New York Central, one of the country’s biggest, which it won in a dramatic proxy battle. It was a proto-conglomerate in the eventual mold of ITT and Gulf+Western, and in the middle of the 20th century it did as many railroad companies, and got the hell out of the railroad business. Its ancillary investments, after a few acquisitions and divestments, added up to an insurance business. (When, in 1970, Penn Central Transportation filed for the biggest bankruptcy to date, its parent company similarly survived and held an insurance business alongside some of the railroad’s real estate. Its successor company, American Premier Underwriters, continued to own New York’s Grand Central Terminal and the air rights above its tracks,¬†leasing them to New York’s Metropolitan Transportation Authority,¬†until 2006 when it sold them to a group of real-estate investors.)

I thought of closing this post by clarifying that I don’t wish the fate of U.S. Steel and Alleghany on Tableau and Zillow, but a century of existence for any company is a remarkable achievement, particularly for one that came about at a high point in investor enthusiasm for its industry.

Photo: Times Square – NASDAQ by luisvilla, on Flickr

Four short links: 2 February 2012

Four short links: 2 February 2012

Build a Button, CMU iPad Course, Materials Conference, and Facebook IPO

  1. Beautiful Buttons for Bootstrap — cute little button creator, with sliders for hue, saturation, and “puffiness”.
  2. CMU iPad Course — iTunes U has the video lectures for a CMU intro to iPad programming.
  3. Inspiring Matterthe conference aims to bring together designers, scientists, artists and humanities people working with materials research and innovation to talk about how they work cross- or trans-disciplinarily, the challenges and tools they’ve found for working collaboratively, and the ways they find inspiration in their work with materials. London, April 2-3.
  4. Facebook’s S-1 Filing (SEC) — the Internets are now full of insights into Facebook’s business, for example Lance Wiggs’s observation that Facebook’s daily user growth is slowing. While 6-10% growth per quarter feels like a lot when annualized, it is getting close to being a normal company. Facebook is running out of target market, and especially target market with pockets deep enough to be monetised. But I think that’s the last piece of Facebook IPO analysis that I’ll link to. Tech Giant IPOs are like Royal Weddings: the people act nice but you know it’s a seething roiling pit of hate, greed, money, and desperation that goes on a bit too long so by the end you just want to put an angry chili-covered porcupine in everyone’s anus and set them all on fire. But perhaps I’m jaded.

The Meat to Math ratio

The ability to augment people (meat) with data and processes (math) is a key to success.

Successful companies find ways to augment their employees, allowing them to operate at scale with customers. Big data, machine learning, and an iterative, experimental mindset are essential — and increasingly, company valuations are tied to the efficiency with which firms put information to work.