Slate Money – “IPOpalooza” (December 12, 2020)

Episode Overview

In this episode, titled “IPOpalooza,” Felix Salmon (Axios), Emily Peck (HuffPost), and Anna Szymanski (Breakingviews) dive into an extraordinary week in the financial world, marked by huge IPOs (Initial Public Offerings) for DoorDash and Airbnb. The hosts explore the mechanics and implications of 2020’s IPO frenzy, the allocation and fairness of IPO profits, the antitrust lawsuits facing Facebook, and the economic and ethical dilemmas of COVID-19 vaccine distribution.

1. IPO Frenzy: DoorDash and Airbnb Go Public

[00:00–18:27]

Key Points:

• DoorDash and Airbnb delivered remarkable IPOs, with stock prices “doubling” (Airbnb) or “almost doubling” (DoorDash) immediately upon going public.
• Felix: “If you're a big institution… you are just sitting on literally, you know, probably hundreds of millions of dollars of free money for doing nothing.” [02:14]
• The large IPO “pops” were partly attributed to the dominance of a few mega-institutional investors like Fidelity and BlackRock, which now consume much of the initial allocation.
• Anna: “In the past, you obviously had lots of institutions who are getting in on these IPOs. Now… with essentially like two or maybe three firms, [banks can] build most of [their] book.” [03:11]
• The underpricing of IPO shares is debated—is it bank “laziness,” relationship management, or a byproduct of demand-driven froth?
• Emily: “Isn't it just, bottom line, good for Airbnb if its stock is worth a lot of money… even if they left $3 billion on the table?” [06:11]
• There are risks to inflated initial share prices: sets unrealistic expectations (“priced for perfection”) and raises the specter of future crashes if expectations aren’t met.
• Felix on Brian Chesky (Airbnb CEO): “[He] kind of goes speechless… he's like, oh, shit. Like, on the one hand, he's now worth $14 billion. On the other hand, now I really need to execute on expectations that… I have not placed on myself.” [10:01]

Memorable Quotes:

• Felix: “It does make it feel like there's something incredibly sort of undemocratic about the IPO process now, even more than it was in 1999…” [12:56]
• Anna: “Frothy IPOs beget more frothy IPOs.” [15:58]
• Emily: “It's just a wild, crazy world, guys… Congress can't come with any relief package. People's unemployment benefits are running out… And then I'm reading about Brian Chesky being surprised on air about his, like, multi-billion dollar windfall. It just seems like something is way broken.” [18:27]

Timestamps:

• [00:00] – Introduction and table setting
• [01:37] – DoorDash & Airbnb IPO performance
• [03:03] – Institutional allocation
• [06:11] – Is a stock price “pop” actually good?
• [09:39] – The risk of expectations, CEO pressure
• [11:16] – Retail investor role (Robinhood, etc.)
• [17:21] – Airbnb layoffs and IPO windfalls; ethical discrepancies during COVID [18:27]

2. Antitrust Case Against Facebook

[19:18–30:13]

Key Points:

• Federal and state authorities filed major antitrust lawsuits seeking to break up Facebook, specifically to force divestment of Instagram and WhatsApp.
• Felix: “There’s two enormous cases… accusing Facebook of being an anti competitive monopoly… they want Facebook to be broken up…” [19:18]
• The panel debates whether Facebook should simply spin off these companies, positing that no one would lose—except perhaps Zuckerberg, who already “crushed the competition.”
• Anna: “I'm sure there’s actually definitely been… integration on the back end, partly because he doesn’t want them to be broken up…”
• Felix: “Mark Zuckerberg… did all of those… for one reason only, which is… to make it as difficult as possible to break Facebook up. And that just seems pretty evil.” [22:13]
• Discussion about the timing and politics of antitrust enforcement: is this about market dominance or shifting political winds?
• Emily: “The way that I think you could tell it's not really political in the way that [the] TikTok deal was, is because 46 AGs have joined the suit, Republican and Democrat.” [26:04]
• The core issue is one of excessive size and dominance, not simply mergers—echoing antitrust against Microsoft in the 1990s.

Memorable Quotes:

• Felix: “At the heart of Facebook [and Google] cases is: you are too big, you are too powerful, you are a monopoly. And that is bad for the economy, that is bad for our democracy, that is bad for a lot of things. And so we need some kind of a remedy here.” [28:01]
• Emily: “If a company is too big, like something does need to be done because then it does become anti democratic and it is bad for everyone.” [29:23]

Timestamps:

• [19:18] – Facebook antitrust lawsuits, break-up debate
• [22:13] – Zuckerberg’s integration moves; “evil” strategies
• [24:50] – Is this about politics or market policy?
• [26:04] – Bipartisan support and the deeper issue
• [28:01] – Antitrust in “big picture” context

3. COVID-19 Vaccine Distribution: Fairness and Economics

[30:13–43:10]

Key Points:

• Consensus across public health communities: prioritize nursing homes, essential workers, at-risk groups; not allocate by ability to pay.
• Felix: “No one… is saying we should use a market mechanism to determine how to distribute the vaccine.” [31:34]
• Anna: “What we saw with PPE clearly shows that using a market to distribute these things in a crisis is a really bad idea.” [31:57]
• The hosts weigh trade-offs between economic efficiency and public health. While, in theory, vaccinating high-productivity workers first could aid GDP, in practice, nothing boosts economic activity more than controlling the virus by targeting high-risk and high-transmission groups.
• Emily: “Rich people have already been vaccinated… working from home… cashing in billions on IPOs… We've already done kind of like a market efficient Covid strategy here… The people who are dying are poor people and essential workers.” [34:20]
• International vaccine equity raises thornier questions: economically powerful countries have secured most doses.
• Felix: “Isn't it bad that that is exactly the mechanism we have used to distribute the vaccine internationally—that it's the rich countries who've been able to buy up all of the vaccine and the poor countries basically haven't been able to get their foot in the door?” [37:18]
• Within the US, even a population-based allocation can be inequitable, as risk levels (elderly populations) are not equally distributed across states.
• The possibility of “vaccine tourism” and challenges of anti-vax segments eating into herd immunity goals.

Memorable Quotes:

• Emily: “It's really important that whatever distribution mechanism is chosen, that it's messaged really well so people understand why it's being done the way it's being done.” [39:22]
• Felix: “The one thing you want to avoid is vaccine tourism. Right? You want to avoid people moving from one state to another state because they will be able to get the vaccine in that other state…” [39:43]

Timestamps:

• [30:13] – Vaccine allocation principles
• [31:57] – Markets vs. public health in distribution
• [34:20] – Economic and ethical arguments
• [37:18] – Global vaccine inequity
• [38:33] – Intra-US allocation flaws; messaging
• [39:43] – Vaccine tourism, participation rates, and acceptance [40:24]
• [41:05] – Would you get a “secret” early vaccine? Panel’s ethical dilemmas

4. Numbers Round

[43:10–47:24]

Highlights:

• Emily’s Number: 16.1% – The percent of Americans who eat 96+ cookies per month. [43:13]
  • Emily: “I don’t think I eat 48 cookies a month, but maybe I should…” [44:05]
• Anna’s Number: $192,000 – The auction price for Barack Obama’s high school basketball jersey, a record. [46:31]
• Felix’s Number: 0.9% – The payout rate of the Jasper Ridge Charitable Fund DAF in Texas, far below legal minimums for foundations. [45:01]

Notable Quotes & Moments

• Felix (on IPO windfalls): “There are winners and losers. And the winners are the people who are lucky enough to get those IPO allocations. And they made an enormous amount of money on basically zero effort.” [05:32]
• Anna (on market fairness): “What we're seeing is just simply a supply demand mismatch. And if you kind of removed some of the current barriers… you probably wouldn't have as much of that.” [14:38]
• Emily (on ethical dissonance): “Brian Chesky being surprised on air about his, like, multi billion dollar windfall. It just seems like something is way broken.” [18:27]

Overall Tone & Takeaways

The conversation is sharp, analytical, with an undercurrent of incredulity at both the existential weirdness of 2020’s markets and the persistent inequities laid bare by COVID-19. The hosts blend financial expertise with social awareness—questioning not just how money moves, but who benefits, who’s excluded, and what it all means for society.

For Further Listening

• IPO mechanics and fairness
• Antitrust and Big Tech: Policy vs. politics
• Public health ethics vs. market mechanisms
• COVID’s impact on both Wall Street and Main Street

End of Summary – Slate Money “IPOpalooza” (December 12, 2020)