4 ms·

> It's a hard to turn down offer, Rubin accepted and tried to recapture the magic pursuing somebody else's vision. But it's damn tough to be a founder / visiona

> It's a hard to turn down offer, Rubin accepted and tried to recapture the magic pursuing somebody else's vision. But it's damn tough to be a founder / visionary under somebody else's thumb, especially when you're set for life financially. That's a story that never works out, but is played out again and again in technical acquisitions as big organizations attempt to find a place for founders. Do you think Market's haven't quite priced this in yet? Market's are supposed to be epistemically efficient and factoring in relevant information.

sgt101 11y ago
That's an economists view of markets, the reality is that the fluctuations of stock every day illustrates the irrationality and near randomness of markets in reality.
dreamfactory2 11y ago
some things aren't for sale
GFK_of_xmaspast 11y ago
"Efficient market" is a hypothesis, not an immutable law of the universe.
- eruditely 11y ago
  Yeah but if this has been going on for quite some time now, people should have adjusted by now. If market's haven't adjusted for this long, then i'm going to say our assessment of the situation and conclusions are incomplete in some major way. This sort of reasoning is saying that buy-outs are overpriced, so we can make a decision-profit by NOT buying these companies and using your money for better opportunities. Something has to be up here.
  - Retra 11y ago
    How long does it actually take for a market to adjust? "Quite some time" is hardly a quantity that confers any relevant information to your expectations.
    - eruditely 11y ago
      Well considering the elite type people participating in these huge deals I assume that they will learn very quickly, and that there is something we are missing here. It's not like companies purchasing other companies is some new phenomenon, it's been a multi-decade affair at this point.
      - hluska 11y ago
        I hate to burst your bubble, but M&A is about as far from rational as you can get. Acquisitions are about much more than the present value of future cash flows.
        eruditely 11y ago
        I know M&A's are known to be unprofitable, so why do they continue to happen? What's going on that we are all missing?
        HillaryBriss 11y ago
        failed experiments. in this case, someone at Google thought Boston Dynamics would be a good fit and that they'd be able to profitably cooperate. well, unanticipated complications prevented it. but they tried something different. sometimes these things do work out well. not this time.
        pjc50 11y ago
        Empire-building. It's usually not profitable for the company, but for the senior execs it's the best way to acquire more subordinates.
        hluska 11y ago
        As pjc50 said, it's often definitely a case of empire building. Other times, the kind of personality that propels one into upper management makes him/her a particularly poor choice to execute an acquisition. Consider strong competitive instincts. While that is an excellent trait in certain types of companies, it can be a nightmare when it comes to acquisitions. Hell, highly competitive people can and have raised the valuation of a company several magnitudes beyond reasonable, simply through a bidding process. In many ways, a competitive acquisition process looks like an auction and all the usual caveats apply.
  - GFK_of_xmaspast 11y ago
    > If market's haven't adjusted for this long, then i'm going to say our assessment of the situation and conclusions are incomplete in some major way When presented with a conflict between your hypothesis and your data, you have (at least) two options: (a) reject the hypothesis (b) posit some hidden data that supports the hypothesis after all
wavegeek 11y ago
The problem is that with long term return structures (such as long term R&D), there is no feasible way to arbitrage away wrong prices. So prices can diverge a long way from fundamental value. This issue happens most visibly with the overall stock market level which reguarly and blatantly violates any kind of rational discounted cash flow e.g. in the dot.com era.

sgt101 11y ago

That's an economists view of markets, the reality is that the fluctuations of stock every day illustrates the irrationality and near randomness of markets in reality.

dreamfactory2 11y ago

some things aren't for sale

GFK_of_xmaspast 11y ago

"Efficient market" is a hypothesis, not an immutable law of the universe.

eruditely 11y ago
Yeah but if this has been going on for quite some time now, people should have adjusted by now. If market's haven't adjusted for this long, then i'm going to say our assessment of the situation and conclusions are incomplete in some major way. This sort of reasoning is saying that buy-outs are overpriced, so we can make a decision-profit by NOT buying these companies and using your money for better opportunities. Something has to be up here.
- Retra 11y ago
  How long does it actually take for a market to adjust? "Quite some time" is hardly a quantity that confers any relevant information to your expectations.
  - eruditely 11y ago
    Well considering the elite type people participating in these huge deals I assume that they will learn very quickly, and that there is something we are missing here. It's not like companies purchasing other companies is some new phenomenon, it's been a multi-decade affair at this point.
    - hluska 11y ago
      I hate to burst your bubble, but M&A is about as far from rational as you can get. Acquisitions are about much more than the present value of future cash flows.
      - eruditely 11y ago
        I know M&A's are known to be unprofitable, so why do they continue to happen? What's going on that we are all missing?
        HillaryBriss 11y ago
        failed experiments. in this case, someone at Google thought Boston Dynamics would be a good fit and that they'd be able to profitably cooperate. well, unanticipated complications prevented it. but they tried something different. sometimes these things do work out well. not this time.
        pjc50 11y ago
        Empire-building. It's usually not profitable for the company, but for the senior execs it's the best way to acquire more subordinates.
        hluska 11y ago
        As pjc50 said, it's often definitely a case of empire building. Other times, the kind of personality that propels one into upper management makes him/her a particularly poor choice to execute an acquisition. Consider strong competitive instincts. While that is an excellent trait in certain types of companies, it can be a nightmare when it comes to acquisitions. Hell, highly competitive people can and have raised the valuation of a company several magnitudes beyond reasonable, simply through a bidding process. In many ways, a competitive acquisition process looks like an auction and all the usual caveats apply.
- GFK_of_xmaspast 11y ago
  > If market's haven't adjusted for this long, then i'm going to say our assessment of the situation and conclusions are incomplete in some major way When presented with a conflict between your hypothesis and your data, you have (at least) two options: (a) reject the hypothesis (b) posit some hidden data that supports the hypothesis after all

wavegeek 11y ago

The problem is that with long term return structures (such as long term R&D), there is no feasible way to arbitrage away wrong prices. So prices can diverge a long way from fundamental value. This issue happens most visibly with the overall stock market level which reguarly and blatantly violates any kind of rational discounted cash flow e.g. in the dot.com era.