4 ms·

Matt Levine suggested that this was an aquihire. And the weird setup where they only buy non voting shares is to not trigger any regulatory review

Peroni 1y ago
$14.3 Billion seems excessive for it to be a pure aquihire play. There's undoubtedly some IP acquisition (or at least exclusive access to certain IP) involved.
- tgv 1y ago
  I know "excessive" is technically correct, but at the same time it seems an understatement.
- owebmaster 1y ago
  Their fantasy money from ScaleAI’s inflated valuation will easily balance this out on the books.
- nikcub 1y ago
  It's about 0.85% of Meta's market cap - less than the 1% they paid for (granted, all of) Instagram. They also paid about 1% of market cap for Oculus ($2b into a ~$220b market cap) Seems about par for Facebook when it comes to company-shifting acquisitions.
  - az226 1y ago
    Little known secret is they paid $2.7B, not $2B. And Zuck and the FB head of M&A were talking shit about John Carmack’s crazy wife, who was doing his negotiation for him. On WhatsApp no less.
    - bigtones 1y ago
      That sounds about right. Thanks for the insight.
diggan 1y ago
> the weird setup where they only buy non voting shares is to not trigger any regulatory review Do regulators actually fall for these sort of things in the US? One would expect companies to be judged based on following the spirit of the law, rather than nitpicking and allowing wide holes like this.
- Loughla 1y ago
  >One would expect companies to be judged based on following the spirit of the law, rather than nitpicking and allowing wide holes like this. The letter of the law is what people follow. The spirit, or intent, of the law is what they argue about in court cases. If the regulation says 49% and a company follows it, who's to say they're exploiting a loophole? They're literally following the law. Until there is a court case and precedent is set.
  - diggan 1y ago
    > who's to say they're exploiting a loophole? I guess "intent" is what matters really. If the intent is to avoid regulatory review and you could prove that intent, then they're trying to exploit it. That in itself should probably trigger a review regardless. If they've arrived at 49% for some other reason(s) than just to avoid regulatory review, then fair enough.
    - Loughla 1y ago
      Correct. That's what courts are for, like I said.
  - rodonn 1y ago
    The Clayton act explicitly includes partial acquisition as still being covered. "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock... [where] the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly." There may be some other regulations that are avoided by a partial acquisition, but it doesn't bring it wholly outside of the relevant antitrust laws.

Peroni 1y ago

$14.3 Billion seems excessive for it to be a pure aquihire play. There's undoubtedly some IP acquisition (or at least exclusive access to certain IP) involved.

tgv 1y ago
I know "excessive" is technically correct, but at the same time it seems an understatement.
owebmaster 1y ago
Their fantasy money from ScaleAI’s inflated valuation will easily balance this out on the books.
nikcub 1y ago
It's about 0.85% of Meta's market cap - less than the 1% they paid for (granted, all of) Instagram. They also paid about 1% of market cap for Oculus ($2b into a ~$220b market cap) Seems about par for Facebook when it comes to company-shifting acquisitions.
- az226 1y ago
  Little known secret is they paid $2.7B, not $2B. And Zuck and the FB head of M&A were talking shit about John Carmack’s crazy wife, who was doing his negotiation for him. On WhatsApp no less.
  - bigtones 1y ago
    That sounds about right. Thanks for the insight.

diggan 1y ago

> the weird setup where they only buy non voting shares is to not trigger any regulatory review Do regulators actually fall for these sort of things in the US? One would expect companies to be judged based on following the spirit of the law, rather than nitpicking and allowing wide holes like this.

Loughla 1y ago
>One would expect companies to be judged based on following the spirit of the law, rather than nitpicking and allowing wide holes like this. The letter of the law is what people follow. The spirit, or intent, of the law is what they argue about in court cases. If the regulation says 49% and a company follows it, who's to say they're exploiting a loophole? They're literally following the law. Until there is a court case and precedent is set.
- diggan 1y ago
  > who's to say they're exploiting a loophole? I guess "intent" is what matters really. If the intent is to avoid regulatory review and you could prove that intent, then they're trying to exploit it. That in itself should probably trigger a review regardless. If they've arrived at 49% for some other reason(s) than just to avoid regulatory review, then fair enough.
  - Loughla 1y ago
    Correct. That's what courts are for, like I said.
- rodonn 1y ago
  The Clayton act explicitly includes partial acquisition as still being covered. "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock... [where] the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly." There may be some other regulations that are avoided by a partial acquisition, but it doesn't bring it wholly outside of the relevant antitrust laws.