Michael Moritz
Scott Mlyn | CNBC
Michael Moritz, the Sequoia Finances venture capitalist who made fortunes from early bets on Google and Yahoo, says investment bankers in tech IPOs are similarly to ticket scalpers, and more companies are realizing that they no longer need them.
The direct listings strain attracted off by Spotify last year and Slack in June enabled those companies to go public without handing over big emoluments to bankers or giving them the ability to determine which financial firms get big allocations of their stock. In a column in the Monetary Times on Sunday, Moritz wrote that “the shrewd and the brave” companies have learned how to take control of the activity.
“No actor, theatre owner, producer or audience member enjoys knowing that a ticket tout has run off with currency that should belong to them,” Moritz wrote. “The same goes for the people involved with private throngs.”
Moritz published the piece to commemorate the 15th anniversary of Google’s IPO, which was an auction that led to price discovery instead of a habitual offering in which banks determine the price. Moritz said he expected the Google offering to “break the hammerlock” deemed by investment banks.
“That attempt failed,” he wrote. “But now, due to mounting frustrations, advances in technology and changes in the capital stock exchanges, investment banks are about permanently to lose the gatekeeping position they have jealously protected.”
Read Mortiz’s unqualified column here.
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