5 ms·
Nope, from Adobe’s 8K filed today with the SEC: “On December 17, 2023, the Company and Figma mutually agreed to terminate the Merger Agreement and entered into
by eigenvalue 3y ago
Nope, from Adobe’s 8K filed today with the SEC:
“On December 17, 2023, the Company and Figma mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement effective as of such date (the “Termination Agreement”). The mutual termination of the Merger Agreement was approved by the Company’s and Figma’s respective Boards of Directors. In accordance with the terms of the Termination Agreement, the Company will make a cash payment to Figma in the previously agreed amount of one billion dollars ($1,000,000,000) (the “Termination Fee”) within three business days following the date thereof. The Termination Fee is the sole and exclusive remedy under the Merger Agreement, and the Company and Figma have each waived any and all other claims in connection with the Merger Agreement and the transactions contemplated thereby.”
- reustle 3y ago> the Company will make a cash payment to Figma in the previously agreed amount of one billion dollars ($1,000,000,000) (the “Termination Fee”) within three business days following the date thereof Three business days to wire $1b, the week before Christmas. That has to be a fun phone call with the bank.
- Ekaros 3y agoI hope they have big bank... Then again it would also be funny if bank crashed because someone was forced to transfer 1 billion.
- eddiewithzato 3y agobanks move so much more daily
- fauigerzigerk 3y agoIndeed. Also, the money is probably coming out of some money market fund or from selling treasuries.
- Vicinity9635 3y ago[dead]
- frankchn 3y agoIn October, FedWire moved $4.275 trillion USD per day on average.
- zymhan 3y agoYeah I'm sure Adobe is just using a single-branch bank
- tsunamifury 3y agoHow is this an issue? You can easily wire up to 999 million with just a mobile device any work day. If you think im joking no I’ve designed it for major banks.
- TedDoesntTalk 3y agoMight be technically possible from an app, but in the USA, the backoffice won't approve it without one-on-one interaction.
- JumpCrisscross 3y ago> in the USA, the backoffice won't approve it without one-on-one interaction For a business like Adobe, yes. They’ll probably want a verification call. Plenty of funds, however, handle similarly-sized transactions with completely electronic verifications.
- tsunamifury 3y agoYea I mean how do people think large companies do things like payroll which is easily more than this monthly.
- TedDoesntTalk 3y agoPayroll is done with ACH, not wire transfer. ACH is reversible so it has fewer controls. Wires are not (generally) reversable.
- tsunamifury 3y agoTechnical Protocol doesn’t matter we’re talking approval and liquidity here. ACH/Wire same dif.
- JumpCrisscross 3y ago> Payroll is done with ACH, not wire transfer For large payrolls, it would be done over wire (between the employer and payroll processor). The employer has leverage and wants to keep the float.
- microtherion 3y agoBank is going to have to dip deep into their swear jar to come up with the money.
- jzl 3y agoHah, reminds me of this: https://youtu.be/7C1Zaqu0wrw https://youtu.be/7C1Zaqu0wrw
- deleted 3y ago[deleted]
- dubcanada 3y agoHere is how it is going to go, Adobe will tell their accountant to wire the money, the accountant will get the details from Figma. Adobe accountant will call their bank or maybe even go in to the branch. And tell them they are sending X to X. It will take a few stamps and confirmation and it will be done in about 5 mins. Some computer somewhere will go - 1 billion Adobe and + 1 billion Figma. On the bank side nothing really happens unless Figma decides it wants to withdrawal all 1 billion. Then X bank will owe Y bank money, that loan will be balanced at some point. It will probably take a few days so Figma will be told it needs a few days. Even if Figma decides to pay all their employees a share, that's also just - 50k Figma, + 50k Bob Smith in a computer somewhere. There is no actual exchange of money until stuff is balanced at some point or you withdrawal. It's all just 1s and 0s in a record.
- disiplus 3y agoThere is for sure exactly defined in the paperwork where the money will go in case of x. That was at least so when we sold our company.
- vl 3y agoThe problem here is not doing the transfer, but holding 1 cool B in cash being ready to transfer. Even if it is in liquid assets, 3 days to liquidate 1B is quite short.
- M2Ys4U 3y agoIt wouldn't surprise me if the timing of the execution of the termination agreement was agreed for after Adobe had liquidated assets.
- bombcar 3y agoThat’s what lines of credit are for if needed. A company of Adobe’s size should be able to obtain that easily (maybe even on a handshake). Their latest report with the SEC would indicate how much “cash” they regularly have on hand.
- iamleppert 3y agoIf I was the board I’d be calling for the CEO’s head after loosing $1 billion for absolutely nothing.
- jefftk 3y agoIf the value of Figma has fallen by more than $1B since they signed the deal (which I think it probably has) then passing up $1B to get out of the deal is not nuts, especially considering the regulatory opposition. Though it depends more on whether the value of Figma to Adobe and less the agreed acquisition cost has fallen below -$1B, since Adobe was presumably agreeing on a deal that they thought gave them significant surplus.
- mattmaroon 3y agoIt’s a common term in these sorts of acquisition attempts now. AT&T paid T-mobile $3 billion. A failed acquisition attempt can be very damaging to the company being acquired. You can lose employees who don’t want to work at the new entity that never happened. It can change your product roadmap (are you really going to invest in directions the acquirer won’t want after completion?) and make your executive team start job hunting. Etc. So it’s not unreasonable or uncommon for the acquirer to agree to such a provision. And the board was presumably highly involved in a large offer like that.
- asah 3y agonot nothing: they got to examine Figma's books, IP/code, staff, etc where Figma got to see nothing about Adobe.
- JumpCrisscross 3y ago> If I was the board I’d be calling for the CEO’s head after loosing $1 billion for absolutely nothing The Board signed off on the deal. Given Adobe’s stock is up for the day, I don’t think shareholders are crying over this termination fee.
- whimsicalism 3y agoinvestors probably figured this out on Dec 13, not today
- mbauman 3y agoWow, thanks for the reference!
- jay-barronville 3y ago1 billi and they didn’t even have to give up any equity. I’m not a fan of the regulators screwing this deal the way they have (primarily due to the precedent they’re setting), but in the grand scheme of things, methinks this is actually a great outcome for Figma. 15 months of hassle with $1B cash at the end, to be delivered within 3 business days.
- TedDoesntTalk 3y agoIncredible that they have $1b sitting around in cash. Wouldn't you at least put it into a bond or treasury?
- GenerWork 3y agoIt probably is in a bond or treasury note. The "within 3 days" probably covers the selling of the bond/treasury, waiting for the funds to clear, and then sending it over to Figma's account.
- vishnugupta 3y agoOr transfer the bonds/treasury to Figma directly? Why go through the hoop when Figma too will just covert it to bond/treasury anyway? Is that allowed?
- bagels 3y agoIf Figma agrees that it satisfies the debt, why not?
- vasco 3y agoNothing that is public that I've seen says this is true. You can get a bridge loan for $1b backed by whatever iliquid assets you have from any major bank, and then it's up to you how quickly you want to unwind other things. The loan might even be interest free if the bank wants to keep Adobe's business for other M&A activities.
- TedDoesntTalk 3y agoBridge loan with $1b liquidity in 4 days? Or are bridge loans essentially open lines of credit?
- vasco 3y agoI used the term bridge loan as a sort of umbrella term that might be technically not the best as my training isn't in finance and I know some of this stuff from exposure by proximity. What I'm referring to sometimes is also called a revolving line of credit, the most famous case was Enron's revolvers for example. The point is big banks will normally allow companies to take out large short term loans for this type of thing, usually having large amounts pre-approved.