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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
by 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 agoI 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 agoI 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 agofailed 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 agoEmpire-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 agoAs 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.
- oldmanjay 11y agoPerhaps because they are also known to be profitable.