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I can't help but feel that a lot of these large companies are choosing not to fight regulatory agencies over acquisitions because after the recent tech correcti
by paxys 3y ago
I can't help but feel that a lot of these large companies are choosing not to fight regulatory agencies over acquisitions because after the recent tech correction the targets are now worth a lot less than what they bid for them (similar to Elon trying to get out of buying Twitter). Easier to pay the break-up fee and move on.
- ado__dev 3y agoTotally agree there. Why spend $1.4b when the company is worth maybe a quarter of that now?
- dheera 3y agoWhy don't they structure deals as a multiplier of VOO? "We will acquire you for 2 million shares of VOO" or something like that. If the only reason is that it's an unorthodox way of doing a deal, I say do it anyway and forge a way into the future of M&A.
- 1980phipsi 3y agoIt’s baffling they don’t do it.
- paxys 3y agoThis isn't totally uncommon. Companies just use their own shares instead of VOO.
- deleted 3y ago[deleted]
- runako 3y agoVOO is up since the iRobot acquisition was announced, which would have resulted in the effective price increasing over time, the opposite of what they want. Nasdaq is ~ flat since then, which also would not capture the economic dynamic desired (some tech valuations have fallen). The Nasdaq Tech 100 does an even worse job at capturing the dynamic: it's up nearly 50% since the deal was announced. You'd have to use something a lot more specific, like a basket of specific stocks or some very small sub-index. But then a smaller basket could have a lot more volatility that may be endogenous to a small set of companies, and someone has to get paid for that volatility.
- tomatocracy 3y agoThis type of structure creates risks around ability to pay which a well advised seller would try to avoid. You could design something which would mitigate that but it would likely end up costing more for the buyer to set up and run anyway. In private deals (one where the company being sold is not directly listed), the traditional way to solve this problem is via earn-outs. In both public and private deals, using the purchasers' stock as the acquisition currency is also relatively common.
- akira2501 3y agoIs this sour grapes on behalf of large companies? They're _deciding_ "not to fight" because of the "tech correction" and not, "the regulatory agencies are finally waking up and applying the law." Easier to pretend they're doing it by choice rather than by force of law, which is finally able to reach them, due to the "social correction" of no longer worshiping tech companies.
- s1artibartfast 3y agoThis misses the point. The regulatory agencies have already applied the law. However, there are options to appeal these decisions, and companies choosing not to do so says something. Furthermore, it is just common sense. If you signed a purchase contract for $1.5 Billion, and it is now worth $0.5 billion, no rational actor would want that deal to go through.
- raverbashing 3y agoIt's kind of the opposite of sour grapes, it's like signing the purchase of a car but then you find out somebody else is selling a similar car for 20% off and you feel like you don't want to buy the car anymore but you signed but then the other guy can't sell you for some reason and you're all too happy to let that slide.
- ActionHank 3y agoSomething else that has happened since the initial talks of this merger is that Roomba machines have fallen far behind the competition who are both more driven and taking bigger risks offering better products for the same price or less.
- tooltower 3y agoI haven't kept up in recent years. Who are the better competitors these days?
- vosper 3y agoI don’t know if they’re better, but from watching reviews I believe Roborock and Dreame are considered pretty good competitors. I’m certainly happy with my Roborock (which has no cameras, and their latest model also comes in a no-camera variant) I wouldn’t touch an iRobot (or any camera vacuum) after their camera scandal: https://www.technologyreview.com/2022/12/19/1065306/roomba-irobot-robot-vacuums-artificial-intelligence-training-data-privacy/amp/ https://www.technologyreview.com/2022/12/19/1065306/roomba-i...
- deleted 3y ago[deleted]
- KerrAvon 3y agoFWIW, production Roombas don't send pictures back to the mothership. The scandal was that pictures from development Roombas -- explicitly expected to be reviewed by humans -- leaked.
- JoshGlazebrook 3y agoRoborock is miles ahead of Roomba.
- BossingAround 3y agoIn what ways? The Roomba J7 I'm using is pretty amazing at what it does; the only thing I'd appreciate would be a remote control for some manual cleaning. The automatic stuff is pretty great.
- dopeboy 3y agoIt's a worrying trend, especially for those of us in startup land. With the Figma deal following through and less companies going public, the assembly line funding model is showing some serious cracks. Hope it's just temporary.
- baq 3y agoIf you work at figma this… shouldn’t be a problem? If you work at a temporarily-not-an-unicorn, no antimonopoly institutions care about you.
- eric-hu 3y agoFor the employees at Figma, their shot at cashing out evaporated when the Adobe deal was called off. I know people who were ready to leave Github in the past, but their manager told them to wait a bit, there’s a big acquisition coming and their equity would be worth sizeably more. So here’s one of those scenarios: you’re working at Figma. Perhaps you’re burned out or just want to try out something different. This acquisition deal with Adobe has been signed and you’re grinding through the days waiting for your chance to cash in on the years of work with Figma that have nearly paid off. Then this happens. This affects startups similarly. The non IPO exit path got that much less attractive.
- datavirtue 3y agoIf your grants at Figma aren't paying yet, they didn't give you anything. My ETFs are paying me every six months.
- throwaway2037 3y ago> My ETFs are paying me every six months. Equity ETFs or bond ETFs? If equity, I guess the max you can get is 4% yield, which is still worse that money market, plus you take equity risk. If bond ETFs, they will tank when rates fall. I never understand the appeal of bond ETFs; money market funds are enough for my fixed income needs. They are basic, easy to understand, liquid, etc.
- chucke1992 3y agoIt actually puts ABK acquisition an absolutely perfect steal - due to their stock crash they were literally worse exactly as they supposed to be post correction. So the price was the ideal.