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>> The entire company is staying in place: we just have different owners now. I've been a part of a couple of these. This statement is somewhere on the spectru
by skeeter2020 5y ago
>> The entire company is staying in place: we just have different owners now.
I've been a part of a couple of these. This statement is somewhere on the spectrum of absolutely naive to willfully disingenuous.
"Someone just paid 2 billion dollars to buy us, but they're not going to change anything, exert any influence or expect payback beyond what we've already been doing."
- spurgu 5y agoNaive indeed. I flew to meet a company we had just acquired and I personally promised them that nothing would change. Even though I believed it at the time of course it didn't pan out that way and to this day I regret saying that.
- sulam 5y agoWow, yeah, never say that. Even if you believe it's true, saying nothing will change is sort of like waving a red flag in front of the bull. Of course things will change over time, they always do!
- GenerocUsername 5y agoIts like fixing the wifi router for your parents and then having them call you to complain that their emails now have a signature at the bottom... "I didnt do that", "Well, you were the last one to touch the internet"
- monsieurbanana 5y agoExcept that in this situation, you really did put the signature on those emails.
- rightbyte 5y agoWell to be fair that is how my coworkers (and I) think too. The one with the latest commit get a ping when the top break.
- izgzhen 5y agoI agree. Why buying a company if you don’t want to make any change? Investment firms make profits by buying low and selling high, and it is hard to sell higher than the purchase price if things are kept the way it is.
- bhandziuk 5y agoSO being SO has increased it's value year over year. There's no need to change anything, just ride those coat tails to profit.
- Aditya_Garg 5y agoIf the total accumulation of year to year profits was higher than 1.8B, then the current owners of Stack Overflow would've never sold.
- qyph 5y agoPerhaps they want liquidity, a more diverse portfolio, etc.
- bhandziuk 5y agoAlso keep in mind that the public SO doesn't even have to change much for there to be "big changes". SO Jobs is where the money is made and they have private Q&A sites for businesses.
- rurp 5y agoMaybe they wanted the cash in hand rather than a high variance company valuation. Or just wanted to transition their money and attention to something else. There are plenty of reasons to want to sell a company in a way that both sides come out ahead.
- bcrosby95 5y agoA bird in the hand is worth two in the bush.
- x0x0 5y agoI read this differently -- I think there's a ceiling on just how much money SO will make, and the SO team has realized there's no future in which they are a company that makes $1B or so per year. Which is fine, but hard if you want to play in vc land or go public. There definitely are companies that will buy something like this to operate it essentially as an annuity. The risk to the employees there is if SO essentially becomes done and the owners want to put it in maintenance mode and operate it as a run-out. Also, it's been 12 years. There's probably a bunch of employees that would like some liquidity.
- picodguyo 5y agoYep. At best this holds true for 12-18 months. The founders/execs play dumb in the interest of minimizing attrition.
- z0ltan 5y agoYup.
- xenadu02 5y agoWhile somewhat rare there are holding companies like Jonas Software that buy lots of smaller software companies in various markets then effectively let each subsidiary run without too much interference. Their philosophy seems to be own most or all of the competitors in a vertical market, sell the software for a reasonable (read: non-Oracle) price with ongoing maintenance, and collect the cash. I only know about them because a relative was Director of Engineering at the time they were acquired and is now CEO. They don't expect any massive changes in revenue with the companies they acquire. They're willing to hire and invest in revamping/improving their products. Their goal is stable revenue by making customers happy enough to keep paying the maintenance. They seem to be doing OK with that business model.
- nine_k 5y agoBerkshire Hathaway has an exactly the same approach: an acquired company keeps operating in the way which made it successful. I won't say this approach turned out bad for Berkshire or Mr. Buffett personally.
- mceachen 5y agoThis approach requires 1. a _huge_ amount of trust and respect for the acquired team to not meddle/interfere, and 2. a huge amount of restraint to not force the acquired team into conforming to whatever standards and norms are present in the acquiring team. Both of these are exceedingly rare.
- deleted 5y ago[deleted]
- xeromal 5y agoI'd say this is accurate for the most part but they bought the first company I worked for out of college and they really tightened the screws on our benefits packages under the guise of "unifications" with their existing stuff. They ended up moving me to a high deductible insurance plan which was absolute nads
- 5y ago
- soheil 5y agoI feel like this is basically a cookie cutter declaration you make as part of an acquisition nowadays, not too dissimilar to “sorry we can’t provide feedback for why we rejected you as a job candidate.”
- tbrownaw 5y agoMy employer is owned by private equity companies. Every few years there's a sale and we get told nothing will change... and every time I've seen (which is I think 2-3, over ~13 years) nothing noticeable has changed.
- mark-r 5y agoI used to think the same, until the last layoff wave took me out.
- LudwigNagasena 5y agoWhy is it naive? If you buy distressed assets, sure, but why would you necessarily want to change a working business?
- rojobuffalo 5y agoit's naive because it's a common claim that pretty much never plays out that way after a year or two. as to why, i'd say the reasons are poor, but it's because of ego, desire for power and influence, greed
- LudwigNagasena 5y agoI don’t think holding companies are famous for that.
- catothedev 5y agoAs a financial buyer there are only 3 ways to make money: 1) higher multiple (buy low, sell high), 2) improve cash flow, or 3) lever-it-up with debt (like when you buy a house with a big mortgage). #2 is the only method that really changes the operations and probably the majority of financial buyers are too busy/lazy to be bothered with it. OTOH, some might hire a new CEO 'with something to prove' give him a lot of options/equity and who know what that person will do. But, basically, if the CEO doesnt change, and the CEOs compensation scheme doesnt dramatically change, and no mergers occur, then the company probably wont change.