5 ms·

> It would never have been enough, not for Williams nor the board, for Sierra to have levelled out as, say, a boutique producer of high-quality adventure games.

• bsder 2y ago
  No. An unprecedent fraud undid them all. And nobody saw it coming. It took two insiders to roll over before anything came to light (ref: Cendant). As many people point out, the CEO has some level of fiduciary duty to investors. If you refuse an offer with a 40% or so premium, you are going to be facing down lawsuits. Finally, while Roberta was enjoying her position, Ken really wanted to quit all of the CEO crap. Finding a CEO to hand things over to is just as fraught as a buyout and probably more likely to bump into bad actors than a buyout. Put it all together and there really was no good reason to refuse the buyout. If the purchasing company hadn't been a fraud, we'd be lauding the decision to sell instead of castigating it.
  • rasz 2y ago
    >If you refuse an offer with a 40% or so premium, you are going to be facing down lawsuits. not if the offer is all garbage stock > Ken really wanted to quit all of the CEO crap. Article contradicts that spending a lot of paragraphs on Ken fighting for position in new company. >there really was no good reason to refuse the buyout Nobody looked for one, nobody wanted to find one due to greed. Otherwise they would be balls deep in CUCks books.
    • x0x0 2y ago
      re: Ken and the ceo -- Ken is desperate for people not to understand Ken is an idiot. The article even points out everyone at Sierra told him not to do it.
  • earnesti 2y ago
    > As many people point out, the CEO has some level of fiduciary duty to investors. If you refuse an offer with a 40% or so premium, you are going to be facing down lawsuits. I think a simple way to avoid this is to ask for a all-cash offer. Naturally it will be either non-existant or much smaller value. If the offer is still good, it is not a problem to accept it. The problem here was that the sellers were accepting stock as a payment, which was garbage.
    • kelnos 2y ago
      I don't think that would tell them much. All-cash requires that the acquiring company either have that cash on hand, go into (further?) debt, or sell new shares to the public to raise the money. Legitimate M&A deals that are in part or even entirely in stock are very common. A refusal to accept anything but an all-cash deal would certainly weed out a fraudster like this one, but it would also eliminate a host of good deals, too.
  • josefx 2y ago
    > No. An unprecedent fraud undid them all. It was plain old accounting fraud. > And nobody saw it coming. Nothing to see if you do not look. > Put it all together and there really was no good reason to refuse the buyout. He claimed he did it to secure Sierras financial future, but didn't see it as an issue when CUC refused to share its financial data. It might be a hindsight thing, but it seems that at least nowadays larger companies spend a lot of time going over finances and other economic data before they agree to that kind of deal. > If the purchasing company hadn't been a fraud They could have been completely honest and still been in a state where the buyout itself would have been enough to break both. Wouldn't be the first time a company overextended itself.
• hitekker 2y ago
  You're taking the right angle with greed (1 Timothy 6:9-11). But I think it goes beyond that: > Williams wasn’t a game designer, but a visionary who saw the company always moving forward, leading the market with other genres, other software, online worlds connecting every kind of person. That Sierra is instead remembered, basically entirely, for these 2D adventure games from the eighties and nineties is, he says, because the company was killed. With respect to Ken, I think his ambition outstripped his ability. He prided his company on being something it wasn't, and himself being something he wasn't either. Sierra had to be something big, he had to be something big; his favored fraudster knew exactly how to exploit that self-illusion. In reality, Ken's own wife hints that Ken was struggling as CEO even before selling, e.g. failing to see through people, over-relying on lieutenants when making decisions, etc. For all the talk of murdering Sierra, I find it interesting Ken doesn't name the culprit. Not the fraudster or his cronies. I think that's because Ken is the one who let them in his house.
  • mattbee 2y ago
    Maybe you've also read his self-published autobiography, but his character flaws are front and centre. He's explicit about his vanity and overconfidence, painfully honest about personal snubs from Gates etc. He comes across as a permanent outsider, just one of those people who never acts on any feedback. So I think he knows. If you loved the company, it's a very interesting book.
  • intexpress 2y ago
    > He prided his company on being something it wasn't To be fair to Sierra, some of their final acts were publishing Half Life, Homeworld, and an expansion for Diablo. They may well have become an enormous publisher if not for the CUC mess.
    • hkt 2y ago
      Re: homeworld, it was one of the greatest games of the 1990s and I remain delighted that it received sequels and a refresh. I have nothing but fond memories of the series and still play it regularly
• rasz 2y ago
  Everyone but Ken, yes. Sierra could have been Cyan https://news.ycombinator.com/item?id=40404054 https://news.ycombinator.com/item?id=40404054 Two successful games 25 years ago and they are still around. Ken ambitions killed Sierra, Ken wanted that G5. This https://www.youtube.com/watch?v=sr9_GfeoCjk https://www.youtube.com/watch?v=sr9_GfeoCjk [Tropic Thunder Tom Cruise Dancing to Flo Rida Low] is an accurate reenactment of how Walter Forbes lured Ken Williams into selling
  • pavlov 2y ago
    Sierra was never a single studio, they were always a publisher too. That's a big difference from Cyan.
• fshbbdssbbgdd 2y ago
  It’s hard to turn down the prospect of making your and all your employees/shareholders investments pay off. In fact, many of them would probably angry if they heard you did that. The potential for an exit is one reason they worked for you and not bigco who pays more. And you didn’t get whatever success you had by ignoring opportunities that presented themselves.
  • repomies69 2y ago
    He should just have asked for all-cash transaction. I think it is fair. If they don't want to sell the company stock and buy the company with cash, or at least make an offer, then there is likelihood that there is some kind of fraud going on.
    • fshbbdssbbgdd 2y ago
      Easy to say in hindsight, but using stock to pay for a merger is common. Most companies are not carrying a big chunk of their value in cash (it’s not capital-efficient). Therefore buying anything sizable for cash will require the combined company to take on debt. So a stock-for-stock merger can result in a combined company that has a safer balance sheet. If the acquiree believes the merger is a good idea, they might consider owning stock in the merged entity to be a good thing. If nobody is offering them a competitive offer in cash, they don’t have much leverage to ask for it anyway. Even if you value the stock offer with some discount for risk, it can still be attractive.
      • deleted 2y ago
        [deleted]
      • Retric 2y ago
        It need not be a pure debt transaction, the combined company can sell stock to the public rather than the shareholders of the old company who may suddenly feel the need to liquidate.
  • zamfi 2y ago
    This wasn't an "exit" though -- the company was already public, and had been for 7 years! It was "just" an offer with a large premium over the current stock price.
• daemin 2y ago
  I would say that if you ever take your company public that you don't own it anymore, it is now owned by the whims of the marketplace as a whole.
  • rob74 2y ago
    Or, to combine your and the OPs points: if you take your company public, you will have to live by the rules of "the love of money". It's also the love of money that ultimately led to Sierra (the more creative company) being killed in favor of Davidson/Blizzard (the more business-savvy company) while they were owned by CUC and then Vivendi.
  • deleted 2y ago
    [deleted]
• asimpletune 2y ago
  Sometimes half is worth more than the whole
• positus 2y ago
  For clarity's sake, the proverb is: "The love of money is the root of all kinds of evils."
  • prometheus76 2y ago
    It's not a proverb, it's a scripture in the Bible. 1 Timothy 6:10 and you and OP are both right, depending on the translation at play. NIV Bible: "For the love of money is a root of all kinds of evil..." KJV Bible: "For the love of money is the root of all evil..."
    • eszed 2y ago
      "Scripture" can be proverb. There's a whole bit of the Christian Bible helpfully labeled "Proverbs", is there not? I was intrigued by the idea (elsewhere in the thread) that the root difference is translation from the vulgate vs translation from Greek, though I don't have the background to evaluate the claim. Regardless, absent really good reasoning I'll defer to the KJV, for reasons of historical importance and literary quality. So many phrases in the NIV (and other modern versions) set my teeth on edge.
    • cess11 2y ago
      Here's the greek: ῥίζα γὰρ πάντων τῶν κακῶν ἐστιν ἡ φιλαργυρία. Crude translation almost word for word: 'root of all the evil is the greed'.
      • eszed 2y ago
        Thanks for that. It's been decades since I took Biblical Greek, but I still recognize a couple of words! I don't see the justification for the NIV's addition of "all kinds". The translation process would have gone: 1) root of all evil is greed [eliminate non-English articles] 2) greed is root of all evil [swap to SVO syntax] 3) greed is the root of all evil [add required English article] 4) The love of money is the root of all evil ["translate" the vocabulary word into simpler terms] There simply isn't any more faithful way to render that thought. You could stop at step three, but the KJV's genius lies in what a small vocabulary it uses. (I just checked: "greed" appears nowhere in the KJV, so the word was on the hit list.) The goal was to make the text understandable to the broadest audience possible - the vast majority of whom, at the time, were uneducated. That the translators were able to maintain that constraint while also creating something of incredible literary power is awe inspiring. If you want to break it down a bit further, the phrasing in step three puts two stressed syllables ("greed is") together, which can be awkward, while the final version puts the verse into an iambic pattern (unstressed syllable preceding a stressed syllable), which rolls off the tongue much easier. The word "evil" then reverses that, which breaks the rhythm and calls attention to the end of the thought. (And, maybe, if you want to get especially literary or theological about it, provides a subtle commentary on the nature of evil.) It's so good.
• x0x0 2y ago
  It's a pretty amazing combination of greed and stupidity. > “They hated it,” he remembers of the board’s reaction. “Because we were on a roll. We were unstoppable at that point.” If it was an acquisition where Sierra would retain control, that’d be one thing, but a merger with three major developers under a parent with no software experience? "It was beyond bad inside Sierra." Fundamentally, dude took stock. Which, unlike cash, made him and the shareholders dependent on ongoing competent execution, from a coupon company that was going to merge multiple software companies and magically continue shipping excellent software. When people asked what expertise does a coupon company have at shipping multiple types of software, it turns out the real answer was their expertise was selling to greedy fools. Pretty good expertise!