David Friedberg

Where does the money go?

The money's already leaked into private credit, which is the next big bubble that's building.

It looks like this chart that you just showed.

Look, there are three ways to go public.

There's the traditional way IPO.

There's the direct listing.

And then there's the reverse merger of the SPAC.

Up until I floated IPO A in 2018, I think it was, the first way was really the only way.

I was involved in two direct listings, Slack and Coinbase.

And in both of those, what I learned is that it has the same vagaries as the traditional IPO.

So in the traditional IPO, you go to a bank, they underwrite you, they act as a gatekeeper, and they take six, seven, 8% fees as a result.

And then they allocate what is essentially underpriced stock to their best customers.

Then you see a one day pop, maybe a two or three day pop.

All of those customers tend to unload and then the stock tends to drift down.

So the IPO is expensive and it typically is mispriced.

The direct listing, you have a different dynamic, which is the first trade is always the highest trade.

And then it just goes straight down.

That happened with Slack and it happened with Coinbase.

Spotify would be in that group as well.

Yeah, with Slack, I remember like I was like offside a billion dollars and I was like, well, I'm never letting this happen again.