4 ms·

Congressional bills would ban tech mergers over $5B

30 points by healsdata 5y ago

joebob42 5y ago
$5b seems pretty low to me to be honest, especially given the way tech valuations work.
- toothpicked 5y ago
mtgx 5y ago
siruncledrew 5y ago
$5B seems low. If it was $5B, then companies with that kinda cash can just vacuum up any early stage companies that could even come close to growing into sizable competitors. In a way, it kinda seems like kneecapping the exit potential for those companies growing and getting acquired.
- deleted 5y ago
  [deleted]
- krnlpnc 5y ago
  So those companies would instead need to bring a product to market and maintain it independently? What is the down side?
  - chii 5y ago
    > What is the down side? The current (fairly large) crop of startups whose exit strategy is to be acquired at large valuations.
mrjangles 5y ago
I know it sounds radical, but I think all mergers should be banned all together. capitalism works best when good companies with a good culture are allowed to grow, become powerful, then die when they turn to shit, and leave room for the younger generation (a survival trick that all life on earth learned long ago). At the moment these companies are acting more like viruses, infecting and feeding off smaller companies to stay alive, and often killing them to reduce competition. I know many people upon reading that would say "what about my payout for the hard work I put into my startup". However, I feel like this culture of selling once you are successful only exists because once you are big enough to become a target, the prospect of continuing to fight against one of these giant monopoly giant-tech-monoliths is dauntingly impossible. If mergers were banned in the first place it would be much smoother sailing all the way to the top. Then again I've never experienced a startup so I probably have no idea what I'm talking about.
- klyrs 5y ago
  I have seen a buyout that made sense. A company was making a niche product, and their demand dwindled until they had a single customer which depended on that product. The company was going under, and their customer offered to buy them. Neither company was in the billions (about 100 and 10 employees), everybody kept their jobs, the buyer was able to better tailor that niche product to their needs; it was a real win/win. I think it's important to preserve that kind of merger and codify the anticompetitive behaviors and write sensible legislation to prevent that.
AngryData 5y ago
I don't expect this to be very popular here for obvious reasons but to me it seems like it would be a huge win for both the average person and society overall. Competition drives innovation and market efficiency, while buying up competitors and mergers reduces competition and incentivizes vaporware and patent trolling in pursuit of a quick buyout. Despite peoples best hopes and wishes, huge multinational corporations and businesses have not passed any meaningful efficiencies or savings to consumers or workers. Any benefits from economies of scale are quickly devoured by investors and high level administration. While good for those few, it comes at the expense of everyone else who have most of their choices taken away.
oversocialized 5y ago

30 points by healsdata 5y ago

joebob42 5y ago

$5b seems pretty low to me to be honest, especially given the way tech valuations work.

toothpicked 5y ago

mtgx 5y ago

siruncledrew 5y ago

$5B seems low. If it was $5B, then companies with that kinda cash can just vacuum up any early stage companies that could even come close to growing into sizable competitors. In a way, it kinda seems like kneecapping the exit potential for those companies growing and getting acquired.

deleted 5y ago
[deleted]
krnlpnc 5y ago
So those companies would instead need to bring a product to market and maintain it independently? What is the down side?
- chii 5y ago
  > What is the down side? The current (fairly large) crop of startups whose exit strategy is to be acquired at large valuations.

mrjangles 5y ago

I know it sounds radical, but I think all mergers should be banned all together. capitalism works best when good companies with a good culture are allowed to grow, become powerful, then die when they turn to shit, and leave room for the younger generation (a survival trick that all life on earth learned long ago). At the moment these companies are acting more like viruses, infecting and feeding off smaller companies to stay alive, and often killing them to reduce competition. I know many people upon reading that would say "what about my payout for the hard work I put into my startup". However, I feel like this culture of selling once you are successful only exists because once you are big enough to become a target, the prospect of continuing to fight against one of these giant monopoly giant-tech-monoliths is dauntingly impossible. If mergers were banned in the first place it would be much smoother sailing all the way to the top. Then again I've never experienced a startup so I probably have no idea what I'm talking about.

klyrs 5y ago
I have seen a buyout that made sense. A company was making a niche product, and their demand dwindled until they had a single customer which depended on that product. The company was going under, and their customer offered to buy them. Neither company was in the billions (about 100 and 10 employees), everybody kept their jobs, the buyer was able to better tailor that niche product to their needs; it was a real win/win. I think it's important to preserve that kind of merger and codify the anticompetitive behaviors and write sensible legislation to prevent that.

AngryData 5y ago

I don't expect this to be very popular here for obvious reasons but to me it seems like it would be a huge win for both the average person and society overall. Competition drives innovation and market efficiency, while buying up competitors and mergers reduces competition and incentivizes vaporware and patent trolling in pursuit of a quick buyout. Despite peoples best hopes and wishes, huge multinational corporations and businesses have not passed any meaningful efficiencies or savings to consumers or workers. Any benefits from economies of scale are quickly devoured by investors and high level administration. While good for those few, it comes at the expense of everyone else who have most of their choices taken away.

oversocialized 5y ago