>"Mark and his signature hoodie: He's actually showing investors he doesn't care that much; he's going to be him. I think that's a mark of immaturity," Wedbush Securities analyst Michael Pachter complained to Bloomberg's Mark Milian. "I think that he has to realize he's bringing investors in as a new constituency right now, and I think he's got to show them the respect that they deserve because he's asking them for their money."
Christ, what an asshole.
It's a negotiation tactic, one many of us use in interviews: by flaunting social convention and dressing down, you're signaling that you have leverage. Mark is the one being wooed, and not the other way around.
By whining about it in the press it just makes it sound like this fellow just isn't used to being the lowest status person in the room.
Regarding to the second quote, the statement just shows how the analyst doesn't get the situation at hand at all. Traditional firms uses IPO to gain cash and expand, true. That is because it is very hard to raise money in that scale using other methods. In the case of Facebook, with over $1B revenue, it can easily raise cash from other forms of investment (hey, who wouldn't want to own a piece of Facebook at this point?).
Instead, what the IPO really does it introduce the pricing of Facebook to the market, which in turn hopefully reduces the volatility of the price. Who gets the most benefit out of this? The investors! Facebook is going to get cash one way or another; it is the investors who gets the most benefit out of its IPO. So Zuckerberg can do whatever he wants. The only ones he has to show respect to are the consumers that uses Facebook, frankly.
For posterity's sake let's make this clear: the SEC rule regarding 500 owners is as follows:
> Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports. These reports are available to the public through the SEC's EDGAR database.
It requires firms to file special reports. The reason why people presume that it means that the firm must go public is simple: there are only a few additional requirements to go public, and the economic advantages in many cases outweigh the paltry effort.
For posterity's sake, this is worth repeating: THERE IS NOTHING FORCING A FIRM TO GO PUBLIC. NOTHING.
You're missing the point. Facebook might not have been "forced" to go public, but they still don't really need the cash from the IPO. And there are undoubtedly lots of bankers who would kill to be in on the facebook IPO.
So the banker who expected Zuckerberg to bow and scrape was still badly mistaken. Zuckerberg isn't really "asking investors for their money" in the IPO, because he doesn't really need that money. That's the point.
Facebook might not have been "forced" to go public, but they still don't really need the cash from the IPO
If they didn't need the cash from the IPO why did they IPO? If they wanted liquidity for employees and investors, then they need to go public and hence should at least pay a modicum of respect (guess who is buying those shares that those investors and employees are selling?)
The people buying the shares are ultimately the public; the bankers are just middlemen, and replaceable ones at that.
If facebook actually did need the cash, why wait until they hit the 500 investor limit? Hitting that limit is clearly playing a role in the timing of the IPO, even if it didn't "force" an IPO.
Facebook as the corporate entity doesn't need the cash; the investors and employees need the exit. In light of that, Mark as an investor and employee does need their cash.
If the exit wasn't important, they would stay private and run the business.
Sure, the extra liquidity is nice for people who hold shares. But, at the same time, the IPO is clearly not a big deal to Zuckerberg, as evidenced by 1. the fact that they've waited until now, and, yes, 2. by the hoodie.
What's the percentage of firms with >500 investors that don't IPO?
I wonder if increasing the number of investors past 500 is more about using equity as a recruiting/retention tool than it is about cash.
I think you trivialize a very important point, namely that the IPO is a big deal for pretty much everyone (as its used as a recruiting tool for employees and as an exit proposition for VC firms), especially to Zuckerberg (who invariably spun stories of potential exits as part of the process).
I think we can agree on the two facts, namely:
- the firm probably doesnt need the cash
- the members of the firm and investors do want the exit provided by an IPO
Facebook plans to have more than 500 "investors", which means that they will have to disclose their financial results anyways, regardless of whether they remain private or not[1]. Given this situation with respect to financial regulation, you might as well become public since you don't gain anything by remaining private. You could say that Facebook is "forced" to go public against their ideal wishes. Little wonder why they wouldn't be coming to Wall Street begging for money.
[1]Facebook revealed in a document sent to potential investors in early 2011 that it was planning to increase its number of shareholders to more than 500. This will force the social networking site to either disclose a lot of financial information or go public by April 2012 -- which is 120 days after the end of Facebook's last fiscal year[2]. Typically the forced disclosure of financials triggers companies to go public, listing their shares on an exchange and, hopefully, cashing in. - http://www.wired.co.uk/news/archive/2012-01/31/facebook-ipo-...
[2]The 500 shareholder threshold forces companies that have more than 499 investors to divulge information about their financial performance. Although the company may still remain private, it must file similar documents to those of public companies. If the number of investors falls back below 500, then the disclosures can be omitted. - http://www.investopedia.com/terms/5/500-shareholder-threshol...
As I mentioned here (http://news.ycombinator.com/item?id=3954910) they are not forced to go public. Plenty of private companies with > 500 shareholders stay private precisely because they dont want to have to deal with wallstreet. Facebook could have chosen to do the same, but instead they chose to go public and engage with wall street.
Perhaps they figured that there was no downside to going public, if they had to disclose their finances anyways? If Zuck has 56% of the voting power, and other former and current Facebook employees have significant shares as well, then it's quite possible that even with the IPO, Wall Street won't have much sway in the company's dealings regardless.
(I am personally a big fan of Costco for rebuffing Wall Street's cries for higher prices and lower worker compensation and benefits)
You might think facebook needs to show respect to it's users, but clearly it doesn't. The relationship between them is one where facebook feels free to abuse their user's trust in the service by being awkward and unfair with their personal data.
And we can speculate all you want, but I'm under the impression that Facebook is primarily doing an IPO, because the SEC is forcing them to do so (500 investor rule). That and well, I think some people want to get paid.
Some people feel uncomfortable or awkward wearing formal clothes, especially if they don't wear them all that often. This would put one at a disadvantage negotiating, and it's not like he'll be kicked out of negotiations for wearing a hoodie.
This is just one possible explanation, but you shouldn't assume he's being a jerk for jerkiness's sake. Also, I'm sure whoever is negotiating with him is commanding a fat paycheck and used to negotiating through situations far more difficult than a dude wearing a hoodie. Bankers tend to just like to complain.
Finally, I'd be mildly surprised if you used underdressing to interviews as a successful tactic. (EDIT: underdressing means dressing lower than expected, not dressing down in general.)
I underdressed to my programming interviews in the bay area (I generally wear what I like). I can't really say if it helped or hurt but I did fine and doubt it mattered much.
It's kind of hard to "underdress" to a programming interview in the Bay Area - indeed, I'm not even sure what the lower bar would be for style of dress for a programmer interview. It's got to be pretty close to what would get you arrested for indecent exposure. :-)
The thing is, if we're interviewing, and the person who shows up in Pajamas rocks out on the whiteboard, and just blows us away with their humility, ability to communicate, domain knowledge, and mental agility - I don't think we'd hold the Pajamas against them. Also - Pajamas are kind of a hipster startup wear on occasion. I recall our VP of HR showing up in pajamas at Loudcloud. And, I saw people wearing Pajamas at Lily's Crepery in San Mateo this weekend. Maybe they would lose marks on the Gym Short/undershirt thing - but they wouldn't automatically flunk out the interview.
In The bay Area? Show up for a Programming Role in a nice Suit with a tie.
Not quite underdressing -- but you'll likely be judged as less capable solely on the way your are dressed.
I've actually found that I've been penalized more for 'over-dressing' than for underdressing over here. I worked a small marketing job for a while a couple years back, and I picked up on wearing suits as an effective way to 'hack' most people into giving you more credibility than you would otherwise initially get (which works great with the whole 'fake-it-til-you-make-it' program an introvert like me needed). So I experimented with this idea and wore a suit pretty much everywhere for about a year (not like traditional white-collar + boring tie suits mind you, think more 'Jonny Cash with a flashy tie'), and while most normal people were receptive to this style (as I expected), I noticed that a fair share of programmers/techies were generally put off/uncomfortable with it. I found it a bit ironic, since I felt I was just doing the same anti-status-quo thing programmers initially did by owning the 'underdressed' style; but I guess it's just too soon for techies to be comfortable with that kind of 180.
You could show up straight from the gym, and, if you could code, we would hire you. You might not make an optimal first impression, but good developers are hard to come by.
tangent: an oddity about pajamas is they are actually quite formal, being a shirt and pants. The top has a collar, cuffs and a front pocket - more formal than a T-shirt. It's odd that people should dress for sleep as if attending an important occasion - perhaps in case they should die before they wake, they are prepared for a funeral, and to meet their maker.
That's the Bay Area. I doubt you could have gotten away with such an activity had you applied for a job on the East Coast, or for a large defense contractor, like Lockheed or Boeing.
ha! I got a job with them in a polo, cargo pants, tennis shoes and a hoody. Looked fantastic in the team photo too, what with everybody else in formal.
He thinks to highly of himself but I find it fashionating why he thinks so highly of himself.
He is absolutely blind to how little his money actually gets him. There is two much money (which is what happens when the FED prints money) chasing too few good investments that needs them (which is what happens when the price to run a company keeps going down).
But yeah, he just cannot fathom that money are not as important and that he by proxy isn't going to be as important.
He wasn't an asshole. Mark is 27 years old. How old is the Wall Street and banking system in this country? Its older than his parents! Bankers are evil, but if you come for money you better show them respect because they rule the game and hold most of chips. I agree with author. Fun time is over! FB needs to show profits and prove to stockholders that its worth their money. Coming in hoodie helps publicity, but that's it. It tells average Facebook yuppie "oh Mark is "selling" but hey he still is himself so everything is fine". FB and internet is still too young to figure itself out. This could be bubble. FB can go down like anything that was trendy in its time. I think buying Instagram for that much money shows how desperately scared Mark is. He was incredibly lucky that Instagram owners didnt turn out to be another Mark and say "we don't sell" and keep building momentum. My sisters that are trendoholics switched from reading "boring" (according to them) Facebook updates and messages to taking snapshots and limited wording on Insta. Trend is moving beyond FB and Mark knows it! Next time when FB wants to buy something overtaking the net, they may hear "no, thank you".
1. Yes, he was an asshole. And is.
2. Who cares how old Wall Street is? Does this magically make an asshole into less of an asshole, or instantly grant him credibility? I sing classical music written by dudes who have been dead for centuries; I don't see anyone lining up to give me more respect and money than bankers. Why not? Don't I automatically deserve it?
3. No, they do not "rule the game". Zuck is the guy with something of value here. Not the bankers. Did you notice which direction the money is flowing here? That tells you who has the power in this transaction.
No it doesnt make Wall St less asshole and obviously the way they handle business is usually unethical, but still one can't deny - they run the show.
Zuck May not have much value if he doesn't raise the money. Wasn't that the major reason why most investors gave him the money at the first place (or any other company in that matter)? To IPO and XX-fold their investments.
You might want to consider that that photo of Mark made every mainstream media and consider how older people who buy stocks might think of investing in facebook if they are turned off by what, to them, will seem like immaturity. There is a reason that company management of many widely held companies appears all serious and well groomed. Have you ever seen a General Electric annual report?
Yet somehow these older people are too stupid to interpret the fact that he's built Facebook? What aspect of finance relies on the sartorial choices of a company's executives?
if you come for money you better show them respect
Okay, so he didn't. What are they going to do? Complain about it?
Anyway, ethics is about what people should do. If you switch to discussing what people can get away with because of power, you're no longer discussing ethics. If you switch back and forth, using "what X can get away with" standard for people with power and "what they should do" for everyone else, then there is something wrong with your argument.
It's astonishing to me how much the Ayn Rand quoters on Wall St get their feelings hurt. Aren't these guys supposed to be the rational titans of industry?
I would see the wall street types more fitting into the "looter" category of Rand's philosophy. They are not directly creating anything of value, but instead skimming money from the ventures of those who do.
Let's not lump everyone together. There will inevitably be some significant minority of people on Wall Street who came there for the respect, and it's little wonder that when they don't get that respect despite the large number of 0s they command they get butt-hurt all too easily.
> if you come for money you better show them respect
If you "come for money", you're doing it wrong. You should come for a mutually beneficial business transaction, and that seems to be exactly what Zuckerberg is doing.
The idea that here, in the 21st century, any successful entrepreneur must garb oneself in rarely-worn, extremely expensive and generally inconvenient Victorian-era ceremonial dress in order to arrange a business transaction is utterly ludicrous.
I'm most effective when I'm at my most confident, and I'm most confident when wearing the clothing that I am used to wearing every day. That might be a suit, and it might be the affordable and well-designed utility clothing that 99% of humanity wears.
If it's good enough to wear whilst creating a company worth billions of dollars, it's good enough to wear whilst selling it.
> rarely-worn, extremely expensive and generally inconvenient Victorian-era ceremonial dress
This annoys me. The 'dev-uniform' of t-shirt, jeans and sneakers is just as constraining as the 'business-uniform' of suits and button downs.
You rarely wear one, they are not necessarily expensive, and they are not inconvenient.
Basically, there is nothing inherently better about jeans and a t-shirt, and nothing inherently bad about suits or anything else that isn't in either category. The key is to not expect others to comply to your weird ideas about dress code and let everyone express themselves without stereotyping them.
"Basically, there is nothing inherently better about jeans and a t-shirt"
More comfortable, more durable, cheaper, better selection of comfortable footwear that doesn't need servicing by a person at the airport or the main floor of an office building... need I go on?
If you pay $300 for well constructed leather boots, they will last you for years, even if you wear them almost every day. They are also much more easily repaired than sneakers, which gives you another nine months of life. So proper boots are actually a better investment than sneakers.
I was really skeptical until I bought really nice boots from Fluevog. Additionally, a good company will stand behind their boots, and give a warranty. Fluevog replaced my boots for free because there was a manufacturing error in the first pair.
Try it. Every man deserves a decent pair of boots. They provide great support and feel amazing.
Same concept applies to dress shoes - Allen Edmonds and Aldens will last years to decades if properly maintained. You will need to replace the soles periodically, but that is not expensive.
As a bonus, good low cut boots go just as well as sneakers to with jeans and a tshirt. I am utterly convinced that the persistence of sneakers is either the product of ignorance when it comes to boot alternatives, or due to non-utilitarian forces that so many HN types deny are a factor in the standard 'dressed down' look.
My suit is very comfortable. It doesn't fall apart. I paid under $100 for an entire outfit (I paid $120 for my jeans sans t-shirt). My shoes are super comfy and I've never had to get them serviced?
I personally find jeans and nice walking boots more comfortable than a formal suit. The most comfortable clothing I have seen recently is the uniforms worn by male porters in a hospital I'm visiting a relative in. Loose cotton, wide sleeved, with simple deck shoes, no contraints. I'm not sure I'd get away teaching in that kit though.
When I wore business casual to work for a little over a year (East Coast job), I never wore a tie except for the interview day. I did, however, wear nice shoes, business pants, and a button-down, long sleeve, collared shirt.
I work in software. The occasions on which I have to run or climb in my work clothes are rare.
That said, those activities make you sweat. Sweaty people smell. While wearing a suit to work doesn't affect your ability to work professionally, smelling bloody well does.
I don't often wear a coat but I do often wear dress pants, collared shirts and dress shoes. I also often hop/climb fences while wearing them, so... yes.
> The idea that here, in the 21st century, any successful entrepreneur must garb oneself in rarely-worn, extremely expensive and generally inconvenient Victorian-era ceremonial dress in order to arrange a business transaction is utterly ludicrous.
Welcome to the industry wide corporate culture of banks! As absolutely ludicrous as this is to you and me, I can tell you first-handedly that this is the bread-and-butter in banking. This goes so far that (hearsay) places like Deutsche Bank have rules where the color/brightness of the tie signals how high up the ranks you are and dark colors must not be worn by youngens.
I'm as sartorial as they come. My friends call me 'Swagnificent'; I typically wore tailored, French-cuff shirts, a fedora and suits to my former job as a sysadmin at a Big 4 firm. People regularly stop me on the street and ask to take pictures of me. TL;DR, I'm all for dressing up.
But something about this delights me. Imagine, walking into a room of self-indulgent, Wall Street pricks, knowing that they're tripping over themselves to get in on the action. I think I'd be tempted to rub it in. Ordinarily, someone approaches a bank out of their own necessity. Here, the tables have turned. And I love it.
Wasn't there a story a few years back about Microsoft calling Zuck for conference call at 9AM, and he told them he was still sleeping; and to call back?
I'm similar and I too got the same amount of pleasure reading this.
Wall Street investors don't have any principles. The only thing they care about is how much money you make for them. Zuck could've shown up naked and they would've still jumped all over each other to invest in Facebook.
And this idiot who complained that Zuck underdressed - if he doesn't invest because of that, and the stock skyrockets, you think he's still going to have his job? Doubt it. He'd be out on the street wearing a hoodie.
>if he doesn't invest because of that, and the stock skyrockets, you think he's still going to have his job? Doubt it. He'd be out on the street wearing a hoodie.
I'm going to stick my neck out here and say that I think he's being rude and arrogant.
Yes, he's in a position of power, and could turn up to his meetings wearing only a cunningly positioned silk scarf, and it would have no effect on the banks' willingness to earn lots of money from overseeing the Facebook IPO.
But when you're in a position of power you also have a responsibility not to be a dick. I realize dress codes etc are a bit different over there in the US, but at work here I normally dress pretty casually.
However, if someone's coming in for interview, I will wear a suit. As I know the candidate's going to turn up in a suit, and it will make them feel uncomfortable if I'm interviewing them in shorts and a t-shirt.
The person in the position of power has a moral obligation not to make everyone else feel uncomfortable or stupid. A great example of this is Queen Victoria drinking from her finger-bowl after one of her guests did - in order to save them from any embarassment or discomfort (http://www.bobssermons.com/sermons/archive/030831.htm).
And yes, bankers have acted arrogantly, and swanned around like they own the place too long. But its hardly a great example to set to just start doing the same yourself as soon as the balance of power tilts.
But when you're in a position of power you also have a responsibility not to be a dick.
Say's who? The greatest minds of our day challenge status quo's, not accept them. "Dress" has historically been a badge of status, which has historically been inherited. I think the big "F U" that Mark is trying to portray (much like Jobs) is that his meritocracy wins.
So if the bankers started wearing hoodies they'll become Meritocratic?
Portraying 'not wearing a suit' as challenging the status quo is a bit of an exaggeration. Maybe Gandhi challenged the status quo with his choice of outfit, but a billionaire turning up to a meeting in a suit is hardly sticking it to the man.
I think it works both ways incidentally- if the banker is coming to your place of work, and you all wear hoodies and shorts, he should make an effort to dress casually too.
A banker would never wear a hoodie to work because that just isn't something that you do. Banking by its nature is a profession based on who you know, where you went to school, and conforming to whatever social norms rule the day. In 1910, that meant you wore a topcoat and hat with a pocketwatch; 1960, it meant a double breasted suit and fedora; in 2012, a fancy single breasted suit with tie.
Wearing casual clothing to these sorts of meetings sends a clear signal -- "Fuck you, I'm the guy with the power here."
Zuckerberg can do this because in reality, what's the downside to him? If Facebook crashes and burns completely, he'll be a billionaire before age 30 who "lost it all" with just a couple hundred million in the bank.
Injecting formality into a construction site I can see: Steel-toed boots prevent smashed feet, hard hats stop brain damage, tool belts keep the floor/ground clear from obstacles.
What does a suit confer other than "you have to wear this because you do"? What are they, five years old?
People respect symbols of authority and perceive you as a bigshot.
I wear a suit for work when I meet with the various luminaries that I need to deal with (maybe 2-3 times a month). You get more respect. Waitresses are more attentive, and people listen to you more.
It's interesting you say this. I've been experimenting with/without suits, on and off at my current place of work (an investment bank front office). What I've noticed is this:
1) If you're careful, you can get away with wearing jeans and trainers (I often wear black 501s with nike low nike cross trainers, and various casual shirts - no one really notices/cares, especially if you're in software).
2) Suits and neat shirt/trousers tend to be the "default" and perhaps signal safety/predictability more than commanding respect (which doesn't make sense since everyone wears suits around here, and everyone doesn't command everyone, so it's a shallow heuristic to use when making quick calls on people - I know some dumb people who wear suits, and smart ones who don't).
3) I've incidentally worn very casual stuff (jeans, no suit) for interviews and then actually worn suit/tie/etc on the job later, i.e. more out of curiosity/wanting to, than obedience. I do think in some ways they can be nicer to wear. If you go more into studying design concepts, you start seeing some good elements in play within the standard template of what constitutes a suit (shirt, blazer, tie, boots, cufflinks, etc). Is there a better alternative? Not sure - I loved Steve Job's outfit too, though.
Imagine the Barrack Obama whitehouse photo with him in a hoodie. It wouldn't be unthinkable for him to do this, but I'm not sure it would communicate the right message to the general public (again, perhaps it's about projecting the idea of safety, stability, predictability, etc). In that sense, suits are a good communication facilitator.
A lot of jackasses wear suits, sure, but a lot of jackasses use iPhones, for example too. It doesn't mean they're a bad thing. The bigger problem perhaps with wearing a suit is that there are so many people wearing them now, many of them doing it because other people do it, rather than because they have some pure conviction to do so, that it has become a "red ocean" strategy, which naturally goes against the flow of innovation.
I don't really see the big deal about suits. I look good in them, and would wear them more but for the cost of acquiring and maintaining them.
Many folks, particularly in IT, dress like muppets. We have one guy who routinely wears track suits in the office, for example. It doesn't give off a good impression.
Maybe Gandhi challenged the status quo with his choice of outfit, but a billionaire turning up to a meeting in a suit is hardly sticking it to the man.
What if the billionaire forces the bankers to take 1/3 of their usual cut? Is that sticking it to the man? I say it is.
(meaning, those who display the greatest abilities in those areas are delegated to be responsible for governing others)
It's very easy to show bureaucratic abilities by use of imagery, symbols, and artifacts. Meritocracy can't be bought. In the end, it depends on what you, as an individual, value.
Once Steve Jobs made it the last 10+ years or so he spent it in a black shirt and jeans.
Another point in the article mentions...
"I think that he has to realize he's bringing investors in as a new constituency right now, and I think he's got to show them the respect that they deserve because he's asking them for their money."
However, this isn't some internet startup that doesn't have revenue yet. This is a company that's making buckets of money already. So in this case I think they really need to dance to his tune and they are going to take the lowered rate because he can go down the street and another bank is going to be jumping at the deal.
Are investment bankers really upset? Or are these just the reporters saying these things? Strange.
If you are literally offended by somebody wearing sensible clothes to the point where you would call them "rude" on that basis alone, I would posit that we're actually discussing your mental state, not anything wrong with their clothing per se.
Yes, you might wear a suit when you want to kiss up to someone. But being gravely offended by somebody not actively kissing up to you is much less becoming of a mature adult than the act of not wearing a suit. The clothes do not hurt you, they do not deprive you of anything — the only problem is that they don't flatter you. But expecting flattery is uncouth, even if you are accustomed to being flattered.
Seems like it needs intent, not just a particular shape. If you give everybody the finger because you mean to be offensive, that's offensive. But if you do it because you just find it more comfortable somehow, nobody should care (although I'm sure they will).
True that. When you're in a meeting where the majority of people wear suits and are serious, you'll be considered the dick if you're wearing a hoodie and are grinning like you just won the lottery :-). It doesn't even have to do with business - people can be offended at a personal level, too.
Maybe the reason he wore those clothes was different - he feels lucky/confident in them, they were the only thing in his closet at the time or something. Or maybe he just doesn't pay much attention to dressing code (if the clothes are comfortable, why not wear them)...
But when you're in a position of power you also have a responsibility not to be a dick.
In general, that's a great idea and I agree. But Wall Street types mostly don't believe in that responsibility. So it's nice to see someone turn the tables on them.
> I'm going to stick my neck out here and say that I think he's being rude and arrogant.
Sure. Wearing what he feels like wearing, something which isn't indecent and what he has been wearing on a regular basis for a long, long time is being rude and arrogant.
>"He's in a position most of us who have scrambled to find obscure documents in order to get a mortgage dream about: Telling a bunch of bankers to take it or leave it."
Um, banks are no different than your auto mechanic. They want and are competing for your business. You can always tell them take it or leave it.
People seem to have this bizarre mentality that you have to go begging to your bank for money, which is hardly the case. Personal business like mortgages and chequing accounts, and for that matter things as large as an IPO, are hyper-competitive. There is a lot of room to shop around.
What is it about banking that people find so intimidating and confusing?
We tried to get a business mortgage - despite being able to show we've paid double the monthly repayment amount in business rent for 7 years no one will even give us a ludicrously bad offer nvm actually accept us as a customer.
This seems like madness to me, add a 25% deposit and an insurance requirement and I think it's impossible for them to lose money on the deal even if we default and they sell off the building - indeed they probably make a pretty good profit that way.
No bank needs my money. There are definitely some auto mechanics that do.
Hah! Hardly. But you're right, being rich would help. I think Zuckerberg qualifies.
As someone else replied, your situation is a direct result of credit tightening, thanks to the recent crisis. Banks lent to a bunch of people who ended up being riskier than the evaluations, so now the banks are being prudent with lending. They consider you (or your business) a credit risk beyond what they're willing to accept. That's not an insult, just the fact-of-the-matter.
Believe me, the banks aren't doing it to spite you; at the moment they just have better ways to spend the money. Right now that happens to be paying down their own debt.
It's more of a tragedy of the commons situation, except most of the bankers ran away with the loot. That's their benchmark and they seem to do very well by it.
Now, if the government(s) stopped running a pump and dump scheme, banksters wouldn't screw us so routinely and predictably. Adapting to a sensible system would be painful short-term though, which is why it won't happen without a collapse.
I'm going to guess here that you're talking about the recent bubble. I think so, yes, it was very predictable.
I wasn't being so specific though. It's a fact of life that expansion and contraction cycles must happen in most Western countries, given the generalised policy of having a (very) fractional reserve and resorting to "the printer" regularly to "stimulate" the economy. These cycles have been happening for many decades and will continue to happen as long as things work roughly the same way.
I'm not sure if I'm misunderstanding you. The business cycle is inherent to market economies and Keynesian economics are both a way to do analysis and a set counter-cyclical fiscal and monetary measures.
Not necessarily. He doesnt have to be rich, all he has to be is mediocre smart. Not apply for credit cards everywhere, burn wholes in his credit, drive recklessly, get in trouble with law, change job like gloves, etc; in other words: be a normal, decent citizen. Then his credit will keep building itself up, and yes every bank will be begging him to take the loan with them, knowing that at the end of the day the mortgage is bank's property until last penny is paid off, so there are limited ways he can "steal" it.
I do not drive recklessly, get in trouble with the law, or change jobs like gloves. I am, by most accounts I would think, a normal, decent citizen. My credit is still pretty shot because I hurt my leg before I had health insurance or a job.
Life isn't so easy to summarize. Bad things happen to good people (whether I am one or not is another question).
I'm not normal but none of your claims for where we've gone wrong fit my situation.
Both in business and privately we pay on time and have assets exceeding our credit. Ergo the only risk of lending to us for premises is that the mortgaged asset will fail to retain the value of the credit extended. At 25% deposit thats a serious piece of risk avoidance in anyone's books.
What's left is that we can't provide a sufficient up side to get any of the banks out of bed. Near zero risk isn't good enough, they want bigger fish. Of course we'd need credit to grow ...
I think the point was that unlike a lot of situations many Americans find themselves in, when going up against a bank, Zuckerberg has leverage - not a lot of people can say that these days (there are a lot more average people applying for mortgages than there are Facebooks applying for IPOs).
Actually at the moment you are probably in a lot better position than the bank - you have money which you are prepared to lend them at a very low rate of interest.
Similarly when you take out a mortgage - your interest is paying their salaries. It's a service industry and the bank manager is your servant.
The only different these days is that you are probably in a much better financial state than the bank!
> Um, banks are no different than your auto mechanic. They want and are competing for your business. You can always tell them take it or leave it.
Allow me to generalize here but in the minds of the majority of average folks pretty much everywhere in the world, banks and bankers used to hold a certain status, an image of serious business and grave importance and a position of some sort of respect. Same goes for politicians. And I cannot tell you how many times such average folks would not believe me that banks loan out, let's say, 10 times as much as you are giving them and that's already conservative. It has only started to slowly change now after all the crises that people start to look down on banks and bankers but you have no idea how many banks over here are pulling the "that was them, not us, we are still serious business and reliable!!!" to win customers over and get away with it.
The point I am trying to make is, most average folks really have no idea what a bank is doing exactly, how they work and how they are doing stuff you can definitely describe as playing with money; and they have no way of evaluating whether that friendly guy with the nice suit and tie and firm handshake is actually just an office drone, like most "bankers", who acts all important and serious, or if they really have anything to say - which most of the time they don't. So banks get away with holding up that "serious business" status with which they can shame you.
And most people typically want something from a bank, at least they walked up to the bank, and aren't exactly the most mature and educated kind of customers to begin with, so they definitely do see banks as something different from their mechanic and they certainly won't slap their oh-so-trusted banker silly with demands but will suck it up and sign and feel like they came begging the whole time. And how ridiculous it would seem to them to suggest maybe bringing in a lawyer so your trusted bank doesn't rob you blind!
And banks know exactly what they can get away with - the masses who have no leverage will certainly not get the humane and professional treatment of an exclusive private bank or a family office; they have no leverage, so they get treated like shit and beggars at their local SuperSeriousTrustworthyPlebeianBank because they hardly have an option or choice anyway. Go to PlebsBank instead, they will offer you practically the same deals in different wrapping and same shit treatment.
And finally, most of us are brought up with respect for money and professional business settings, so banks, bankers and their suits definitely trigger and touch the right buttons on most people there and shame you into feeling bad since most money issues are pretty tough for the real 99%ers. IT guys are usually well off and could easily cut most of their monthly expenses since none of them are vital.
Thank you. No one pays much attention to sell-side analysts. If I were one of the bankers on the FB deal I would be more surprised if Zuckerburg came to a meeting with a suit on.
Exactly. And if he had come in a suit people would have been saying that he cares so much about what "Wall Street" thinks that he must be "selling out" or even worse trying to get a higher than valuation than FB deserves etc.
I'm not a huge facebook fan, but I have to agree. Since when is wall street in a position to say "we need to be taken seriously" after all the crap they caused first hand to things for the sake of making money.
Isn't all the faux-positioning and over-reverence to the banks the main problem with wall street anyway?
Wall Street might take themselves more seriously if we had let them feel some pain from their mistakes. Instead we bailed them out, like a rich parent bails his spoiled kid out of jail after a DUI.
So Mark Zuckerberg wears the regulation silicon valley uniform to a meeting with bankers wearing their regulation wall street uniform? I'm not sure what the interesting content to this story is, but would be happy to be enlightened!
I like this quote from another CNet article on the Facebook IPO:
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In the case of Facebook -- whose T-shirt-wearing, 27-year-old chief executive, Mark Zuckerberg, is said to appreciate status updates more than stock brokers -- it's unlikely advisors will be able to command the standard rate.
"These Valley types think this whole process could be automated and they don't have to pay 7 percent to these flashy, French-cufflink-wearing Wall Street types," said Eric Jackson, founder and managing member of Ironfire Capital, a technology-focused hedge fund, who has interacted professionally with executives at Facebook and other social-media companies.
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I doubt the IPO process can be automated to any large degree (unless all the players somehow started thinking like engineers) but I'd sure be happy to see people try!
IPOs don't have to be automated to end what is essentially price collusion by the investment banks on financing fees. It doesn't take that much more "work" by a bank to do an IPO for Facebook as it would for a company 1/50th the size. (I've worked on both size deals; the smaller ones are sometimes even worse because larger deals often have more seasoned professionals inside the issuer.) There are a lot of banks that would love to undercut the standard 5-7% IPO fee but they're afraid of being cut out of lots of other deals as punishment by the other banks.
Good for FB for questioning why banks still get 7% of new equity issues. It's highway robbery.
Nice insight there, and it makes sense. I guess the question is, are there good reasons for banking services to be so expensive, besides the inherent power advantages that the players possess? And if I may be allowed to repeat a common trope, all that wealth easily buys or wins the political influence necessary to keep the market regulations highly favorable to them.
50 or 100 years ago, there was real risk inherent in being an equity underwriter. IPO underwriters purchase the equity from the issuer and resell it to the market, and in theory that creates material risk that they might not be able to resell it at a profit. These days, they've pre-sold the equity (usually several times over) to institutional investors before they do the deal, so the risk is pretty minimal. Just look at the average first-day pop (something like 20%?) on large IPOs and you can see how little risk they're taking.
Stocks generally don't trade on purely quantitative analysis, but on investor assessments of their 'story' and how that will play out over time. If you think corporations are going to invest in networking gear you look at Cisco et al. You inspect that universe for management (good or bad?) / product (great? promising new stuff? obsoleting?) / financial stories (leverage? balance sheet clarity?), and for valuation (P / E, enterprise value to EBITDA). If you think someone's valuation is low given the stories you believe, you buy.
For seasoned stocks a market consensus about the relevant stories emerge, and events within those stories drive the trading moves. People making money by being the first to adopt or drop stories.
But an IPO has no market-consensus stories of its own. So the book-building process involves explaining the company and getting market feedback on the credibility of that story.
Now this may or may not make sense. But it does give management some feeling of relationship with the market, by which they can hear what investors think and possibly influence those perceptions. Given the importance of stock price to most managements, it would be a very bold team that went forward without any perceived tool for managing the process.
I don't know much about it, but it does mainly seem to be about business and social relationships, due diligence, negotiation, accounting, and marketing with a compelling pitchbook or whatever they call it.
It doesn't seem so much like a target for automation so much as a target for "pro-competitive intervention" (which is very unlikely to happen).
From the other article on HN today it seems that they've tried to do some of that. They wrote their own pre-IPO prospectus and done the leg-work themselves on other things. It's not "automated", but it's cutting out a lot of what those finance companies would have done.
I've got a question for the repeated assertions that "JP morgan / GS / etc repaid their bailout money"...
They only repaid that money because the bailed-out AIG paid off their credit default swaps, right? So isn't it only true in the most narrow sense that they paid it back, considering that the gov't totally ate it on AIG?
Yes, but if you want to take a narrow view, you can't blame Chase for AIG's mistakes.
"Bailout" money is tracked in the account of the entity that receives it, but I don't think it's reasonable to continue tracing it as it moves around. Bailout dollars are just as green as regular dollars. If someone at Chase buys a car with bailout dollars, then the car salesman buys lunch with his commission, are you going to claw back the bailout dollars from the waiter? Debts are owed by the people who receive the money, not the guy left holding the hot potato.
You buy a bond, you're not guaranteed 4% interest, you're gambling that the entity who's indebted to you will still be around long enough to pay you. Same with these credit default swaps.
If the government doesn't step in, AIG folds and Chase doesn't get paid for those CDS contracts. Nobody paid the government back for AIG.
The government did not back those credit default swaps, until they did of course. But the fact that the government stood behind other forms of insurance at AIG doesn't mean that they were obligated to pay back the CDSs. Again, until they did so after the fact.
Yes, and worse, they repaid it through government-sponsored arbitrage: bank "holding companies" borrowed from the Fed discount window at ultra low rates, and loaned to others at a higher rate.
A bailout paid with a bailout, which tells us nothing about the health or viability of these financial institutions.
Do you have a cite on the CDSs never getting paid? Not saying I don't believe you, just couldn't find it on my own.
I checked on the projected profit, and it's quite a projection, based on the fact that the gov't is currently selling off from 70% ownership of AIG to 61%. So basically, that seems to me that all of AIG's operating profits are going to buying back stock from the government. Which is great. But the government still ate it on the initial bailout and if those CDSs were paid out and kept the banks afloat, it was done with government money.
You seem to be clinging hard to the notion that the bailed out banks were able to pay the money back largely because AIG was bailed out, and the government is going to lose big on AIG, which was really a backdoor bailout to the other banks.
Two years ago, I would have agreed with that 100%. AIG has recovered far better that I would have expected, and the government will likely get the money back from AIG, albeit much slower than the banks.
Even the almighty Steve Jobs when visited a Nobel award ceremony wore a tie. Bottom line it all depends on the importance of the event. You can't demand respect, you can only earn it. And the bankers haven't earn it a bit.
"Clothing is the outward expression of a man’s state of mind. It is his attire that tells the world what he thinks of himself." -Pearl Binder
"Dressing conscientiously is exalting in the act of being alive." -Gay Talese
It doesn't much matter what Zuckerberg signals or doesn't signal to Wall Street bankers by wearing a hoodie. It won't have a material impact on his company's offering.
Coco Chanel used to say that one shouldn't leave the house without putting some effort into one's appearance -- if only out of politeness. It is, after all, the rest of us who have to look at you. The most unfortunate part of this story is that Zuckerberg fails to realize -- or care -- that a little sartorial attention imparts respect for the people with whom you are doing business, both personally and professionally.
Whether he likes it or not, Zuck is now a high profile individual, with all the attention that follows suit. That's, in my mind, an opportunity to think critically about how he presents himself aesthetically. Contrary to what most posters here seem to think, fashion isn't binary: there are more choices than a hoodie and jeans or a suit. Putting some effort into his appearance doesn't mean he has to look like, or imply endorsement of, Wall Street bankers. If anything, purposefully flaunting that convention is the opposite side of the same coin.
There's an unspoken assumption behind all this, that I'm wondering about.
So, FB is having the usual IPO roadshow, but they're not doing it quite as expected. My question: Why are they having the roadshow at all?
Instead they could have done a few interviews with major business magazines (which I believe they did), put out what amounts to an annual report, to get people information, maybe even had a special hotshot-analyst-only webpage for submitting questions about strategy & what not.
What does the roadshow get them that the above wouldn't have? The only things I can think of are time & money spent, and lots of headaches.
Western business wear is standard in many workplaces around the globe, even in countries where the usual daily wear may be a distinctive national costume.
Some non-Western businesspeople will wear national costume nonetheless. A Saudi Arabian sheikh may wear the traditional robes and headdress to an international conference; United Arab Emirates diplomats in particular are noted for attending conventions of the United Nations General Assembly in full keffiyeh and thawb. Diplomats of the People's Republic of China are similarly noted for wearing the Mao suit to international events; Indian leaders often wear Nehru jackets, with Manmohan Singh wearing a suit-like combination including such a jacket with his Sikh turban. Wearing national costume in such contexts can proclaim national pride, or just extremely high status which allows the wearer to defy convention.
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Indeed, maybe that's what's happening here: the corporate chieftain showing his power among those in the room. Let Zuckerberg peacock; he is within his full rights to. Does a client have to dress however his banker does?
Big f-ing deal. This is basically a puff piece. I don't think he is annoying the bankers, at this point everyone expects him to wear a hoodie. If he really wanted to annoy the bankers he would have done google style Dutch auction ipo. The bankers really hated that.
Anyone who follows the console gaming market will instantly recognize Michael Pachter as a first-class media troll that says ridiculous things to get his name mentioned in articles.
It would probably be better to just ignore this guy instead of playing into him.
To me the big story of this IPO is that Facebook execs are giving tacit approval to large amounts of pedophilia and hate material that exist on the site because for them to remove it, they'd have to acknowledge it exists first, and they feel this could turn off investors.
Why do companies put up with the 1-3% share of the bank for an IPO? What is the service the banks provide, and do they have more work if the IPO is bigger? Otherwise, why not give them a flat fee?
I suppose Facebook could whip up a trading system for "virtual FB shares" on top of FB on a weekend, no need for banks and stock markets at all? Some lawyers to comply with regulations, though :-/
They already have their own currency, so presumably also an infrastructure for transactions and so on.
This is ridiculous. The whole thing. The way he dressed probably says none of the things they think. That is typical behavior for a self made man who had to actually create something of value to make a buck instead of having to do social jockeying to get hired. Different worlds. The bankers live in a monkey sphere where pecking order is incredibly important. Mark does not. "There is always room at the top" and all that.
The average IPO proceeds for the past two decades have never exceeded 100 million and have been hovering around 70 for a while. At 3% that means the typical cut is $2.1 million or less. Facebook plans to raise $11.8 billion, which at 1% would be $118 million. Compensation of fifty times normal implied by the 1% figure thrown out in the article still seems pretty high.
Microsoft made him wealthy. People became amazed and dazed, willing to give him more money.
Good on him for not caring. FU money. He suckered Microsoft and that's enough. He's set for life.
But it's not the hoodie, it's who's in it.
If he's rejected by investment bankers, it's not because he wore a hoodie. It's because of who he is. Wearing hoodies to meetings is but one very small part.
What he wears should not matter, except he has a dress code for people who come interview for a job at Facebook.
So, he certainly deserves a ribbing for believing he is above his own rules.
There is no dress code for people who come to interview for a job at Facebook. I am curious, was something vaguely worded in an email you've received? Please let me know.
I came in in jeans, t-shirt, and a sweat-shirt. This applies to all Silicon Valley companies: wear whatever you're comfortable interviewing in.
One of the previous I worked for used to say "dress casually" (meaning "you don't need to wear a suit"), but we noticed that people have began to interpret it as "wear business casual" and have been reacting strangely.
thats funny; they told me to come to the prom night and didnt mention a thing about what to dress, but still I haven't came naked.
just because they havent told doesn't necessarily mean you shouldnt have your own sense as of what to wear to work. if that would be me, and not seeing anyone how they really look at work inside fb, i would came with suit and tie and figure things out the first day.
If you would show up at Facebook wearing a suit and tie on your first day, they should probably fire you on the spot for being so utterly braindead as to not figure out any of their culture from your interview or from Internet research or from the "what's it like to work at Facebook" videos and pictures they have on their career site.
Awesome. I take this as a sign things are changing. I can't wait to see the day when technology companies are the top of the food chain, and bankers are second.
Of course if he was a real maverick he would tell the bankers and the stock market to stuff it.
He has more customers on his site than the Nasdaq has share buyers/sellers. If he decided to reinvent stock markets and simply sell shares directly to facebook members then you would see some panic!
After all if shares are all traded electronically why do we need a room full of scrolling displays pretending to be ticker tape and opened by a bell? Why not have buying and selling shares in any company a feature of facebook ?
Exactly. I was a lot more impressed by Larry and Sergei's IPO, where they really gave a fat middle finger to the Street. Who gives a fuck about a hoodie.
This is just a branding exercise to show how 'real' Mark Zuckerberg is and I would be surprised if there wasn't some high-powered PR people involved in shaping his public image, including the whole hoodie thing and training him in public speaking (and possibly placing fawning stories like this one).
I had the same idea. I think FB even has all the infrastructure in place already. They have Facebook coins, virtual goods, transactions. Shares could be just another virtual good.
The bankers might return the favor with downgrades and other stuff soon enough (and yes, he will have to care once the stock goes down, no matter what he says).
Some occasions call for slippers, others for khakis and others for a suit and tie. Wear an ill fitting suit to show that you're not comfortable in one if want, but wear a freaking suit. You're asking strangers to buy with their hard earned money about $10 billion of your $100 billion pie. Show some respect for the occasion.
I look like fucking Bob Marley, I just fucking do. This hair is a fucking baby, but makes me flow like Spike Spiegal. I am not kidding you. I wear what I wear because, quite frankly, I found most of it. And I'm not letting it go. It's my "brand" or whatever trash-jargon concept you wish to apply. And I develop web apps. (these realizations were documented in hindsight to the following:) (But just a tad before: I actually had a client ask, "So what's up with the hair?" This "style" occurs naturally. I do what I can with what I've accepted about my personal image and what I am willing to accept of it.)
I took a job at Waste Management in Houston Corporate Headquaters with KF and BG. KF a hip, young but distinguished-looking 30-something, and BG another minority like me. We worked with git and I drew all sorts of nutty information architecture concepts upon a dry-erase board wall on the 17-th floor. Downtown Houston. We did front-end development. The teams wiped out now, after about a year. I believe I triggered part of that. And then they threw SharePoint at us. We were expected to devise a CSS system around trashy SilverLight modules and around some SilverLight developers bogus understanding of front-end considerations. And then the Enterprise CMS with no documentation and no "technical vision."
Garbage. In a world like this, why should Zuckerberg care? Developers have seen the dirty laundry of these rotting industries, and they're going to wear it.
The day it struck me is when I decided to take my morning stroll around the office, to strike up that Office Space tone for the day. So I could write my some-number-of-lines-of-code. My coffee was stale and depressing. As I turned the corner, a VP, along with others, about their own morning stroll, shouts at me, "Whoa! Hair!"
You just can't fucking win with these fucking suits.
I am preparing to compute in hostile climates (cold and hot climates, urban noisescapes, parking garages, etc.). I am preparing to compute in space.
What Zuckerberg chooses to wear to a meeting with bankers should not matter at all. If anything it's a kind of reverse IQ test for those he's meeting with. It doesn't say anything bad about his own. It might about theirs, if they have a problem with it. If he went totally naked, that would be different. But younger generations of workers are increasingly casual, and that's a world I for one welcome. Substance matters most.
Christ, what an asshole.
It's a negotiation tactic, one many of us use in interviews: by flaunting social convention and dressing down, you're signaling that you have leverage. Mark is the one being wooed, and not the other way around.
By whining about it in the press it just makes it sound like this fellow just isn't used to being the lowest status person in the room.