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You are right. This thinking is finance thinking as opposed to product thinking. It seems corporations are acting as hedge funds once they hit this stage of qua
by foobar_ 6y ago
You are right. This thinking is finance thinking as opposed to product thinking. It seems corporations are acting as hedge funds once they hit this stage of quasi monopoly / oligopoly.
In reality it's just squashing the competition and increasing sales numbers. It's just a quirk of the law that it seems legal. I literally can't think of one silicon valley acquisition that actually ended in synergy.
- vikramkr 6y agoThey probably literally brought in hedge fund people to be their CFO. And it's not hard to hire McKinsey to make a slide deck backing up your strategy to acquire a company for whatever reason. Interestingly, actual hedge funds tend to not like companies that act like hedge funds. They want companies that are focused on one area since they think they're better at diversifying their portfolios than the management at these portfolio companies. They'd rather have fine grained control over what markets/products/industries/regions they have exposure to, and you cant do that with these messy conglomerates. That's why fiscal discipline being imposed at Google looked like separating business units and providing insights into the individual business units of the company, so even if investors in alphabet can't control what alphabet diversifies into, they can at least understand and evaluate it.
- foobar_ 6y agoThat's probably it, the CFO. I've mostly been sold on Jeremy Corbyn's ideas on worker cooperatives. I like open source based economies, they seem to encourage innovation and are fairly similar. The concept of hedge fund is completely fine as well. Messy conglomerates though! Ughh it's like a code refactor gone wrong 90% of the time. I guess I like my naive capitalism of build a product, sell, make money and keep everyone happy.