Should founders expect public market stock reactions to align with their own timeline of business performance?

Woody Marshall · Oct 11, 2023

Post-IPO stock performance of the recent listings is not indicative of the underlying businesses; it reflects macro, small floats, thin volumes and short interest

With small offerings, small changes in volume have massive impacts; the Fed comments and the ten-year over 4.5% hit at the same time, and short interest against small floats and future lockup releases is likely off the charts

Scope: not a trader, guessing on short interest

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Imran Khan · Aug 26, 2024

The IPO price doesn't matter; valuation is just a snapshot and founders who obsess over it are neglecting their actual job of building the business

Public stocks move daily for reasons inside and outside the company's control, such as interest rates; determining the value of a business is the investor's job, not the founder's

Scope: assumes a good business generating cash flow over a long horizon

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Max Levchin · Feb 5, 2025

In the short term the market is a voting machine and in the long term a weighing machine, so founders should take comfort in that rather than expect the market to react on their timeline

You don't get to tell the market when or how to react to good or bad news, and temporal mismatches between real performance and stock price are normal

Scope: especially for high-volatility startup stocks

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David Vélez · Sep 11, 2023

After the post-IPO stock hit, the right response was to separate what the company controls (execution) from what it does not (US rates and inflation) and focus only on the former

The stock drop created internal stress, and identifying the controllables was what relieved it

56:19 Focus only on controllable execution not uncontrollable macro stock swings