Ben Gilbert: evaluation

Transcript context

…Yup. I like that you took what would have happened otherwise there. I was thinking, since this episode is going to be about the IPO and grading the IPO, what would have happened if they did an IPO? Until your comment there, I was going to say they were screwed because I thought they desperately needed access to cash. Over the course of the IPO and three subsequent debt and equity offerings, they've now raised in their $5 billion since the IPO or including the IPO. This is a company that does need cash to grow. It didn't need cash to grow originally because it was just growing like wildfire on WeChat, but now they have to invest dollars to make this thing grow and big dollars. I think they have a $1.5 billion reserve for subsidies this year. To me, there was this real danger of growing big fast but not being able to effectively monetize their user base if they weren't able to keep growing into the more valuable user base. I do still think that's true even with your comment about them having really great cash flow dynamics. But I would say, this company needed the IPO or go raise a SoftBank round or more likely a Tencent round that's simulated on IPO around the time that they did. It's interesting. At least one of the equity follow-on rounds that they did as equity raises after the IPO, I believe Tencent bought most of or at least a significant portion. They continue to invest dollars into the company even though they're already the largest shareholder.…

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