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They probably want to buy it for alpha. What else would a PE firm want with a high multiple, low growth pubic company.
by tgtweak 4y ago
They probably want to buy it for alpha. What else would a PE firm want with a high multiple, low growth pubic company.
- kvirani 4y agoSorry what does alpha mean here?
- rakamotog 4y agoAlpha as I understand is risk adjusted return. Can you or anyone explain how acquiring a tech company can deliver better alpha?
- tgtweak 4y agoI mean they want to buy it to acquire data about public companies so they can make market moves ahead of quarterly filings. If a company is using zendesk and there is an uptick in tickets or traffic - they can calculate growth based on that. There were PE firms buying email companies back in the day to look at # of emails from netflix for new subscriptions or cancellations - and they used that to determine if growth was up or down.