Graphic drawings of a dying unicorn hemorrhaging rainbow-colored blood have disappeared from downtown Palo Alto.
The flyers appeared on University Avenue lampposts and trees last week with warnings for a startup company’s workers, reading: “your common shares are worthless.”
NBC Bay Area tracked down and met with the person responsible for posting them, who goes by the name “Palantir_Watcher” online. He wouldn’t reveal his identity on air, but says he made and posted the flyers after a “well-placed” source told him the company’s common stock was worth nothing.
The bisected unicorn is a harbinger of sorts, meant to warn that the tech bubble is about to burst again. In the tech world, “unicorn” refers to private companies valued at $1 billion or more.
The dying unicorn posters showed up outside the offices of Palantir, the super-secretive company that makes cyber-security software for government agencies. It’s valued at $20 billion, but experts say it’s nearly impossible to know what it’s really worth without being on the inside.
Palantir did not return requests for comment, but many financial experts have come out on the company’s side.
“To think employee shares would be worthless when sophisticated investors are valuating the company in billions of dollars would be unlikely,” Rocket Lawyer founder and CEO Charley Moore said.
Moore says the slain unicorn may be a sign of the times. Going public is getting more difficult and venture capitalists are getting more stingy.
“It may be bust 4.0,” Moore said when asked if we were headed on a course for Tech Bust 2.0. “There have been multiple economic cycles just in my career: the most recent housing bubble. But before that, we had the internet bubble.”
Mary Russell, a Palo Alto-based attorney who counsels people on stock options, says it has been more common now than in the last few years for startup companies to offer their stocks at lower prices. Also known as Down Round financing, the method could be a sign there is more risk than there was before or simply be mirroring a downturn in the public market, according to Russell.
Chris Zaharias, a long-time tech employee, says he’s seen unicorn blood spilt in the past.
“My very first big startup was Netscape,” said Zaharias.
After working for startups for 20 years, he drafted the Startup Equity Bill of Rights, which encourages startup employees to ask their companies for more transparency.
Zaharias says he can’t imagine the next bust to be as big as in 2000, but believes the dead unicorn posters aren’t off the mark.
“You’re going to see far fewer people leaving the Facebooks, the Googles and the Apples of the world to chase the startup dream because they’re hearing all of the horror stories of things going bad and people not finding the gold at the end of the rainbow,” Zaharias said.
Palantir_Watcher told NBC Bay Area he has no plans of putting up any more flyers.