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Yes? Not everything is about capital owners and their profits. There is a lot of importance in the competition in the market and customers having choice of best

Yes? Not everything is about capital owners and their profits. There is a lot of importance in the competition in the market and customers having choice of best products around. Figma competing with adobe is one of the examples. Even from capital point of view everyone is now forced to make their bet - either on adobe or figma, so it’s more efficient capital allocation too.

mattmcknight 1y ago
But how is the IPO a sign of success in that case?
- alchemyzach 1y ago
  because it means they stayed independent and didnt get absorbed by a major megacorp that is already notorious for trying to corner the market of an entire industry and then over-charging
  - austhrow743 1y ago
    That’s unrelated to the IPO.
    - littlestymaar 1y ago
      How? A VC-backed company must have an exit path for its investors at some point, and this exit is either: - sell the company to a bigger player, reinforcing their dominant position (often close to monopolistic in tech). - go to IPO, keeping the company independence and fighting power concentration.
      - kgwgk 1y ago
        There is a third option. (According to some LLM that will remain unnamed Vungle, Wrike, and Acquia are textbook cases of direct VC‑backed startups being bought out by private equity without an IPO or corporate acquisition. Not verified.)
        littlestymaar 1y ago
        That's true, but PE is negligible in tech. And if all you can rely on for exit is private equity then you'll end up with a tech scene as dynamic as the European one…
  - roenxi 1y ago
    Figma is a web app. Web apps are fundamentally a hyper-competitive market because literally anyone can just throw something up on the internet if they think there is a need for it. The risk here of Adobe overcharging for it is rather low - someone would build a cheap clone. People keep coming up with theories that companies are about to corner the market then over-charge, but the theories vastly outnumber the cases where it ever happens in practice. It is almost always that the biggest companies in the market are just more competitive (lower prices or higher quality) than all the others.
    - 9dev 1y ago
      That is not what would happen. Figma has built a huge moat through its brand by now, and most customers would continue to use it; some of them probably already have an Adobe subscription anyway, so Adobe would naturally try to make it easier or more integrated for these customers. A clone would need to start from scratch and compete against a huge corporation with virtually unlimited funds. > It is almost always that the biggest companies in the market are just more competitive (lower prices or higher quality) than all the others. That is almost always not what is happening. The big players extinguish any would-be competition early by buying them or throwing sticks into their wheels. They can afford to strategically make a loss in a given area to underbid the competition by overcharging in others, or relying on synergies. There are numerous examples where small teams built highly qualitative alternatives to corpo stuff, but had to compete against the network effects and brand names instead.
  - mattmcknight 1y ago
    They were independent the whole time and it wasn't considered a success. I suppose IPO is an indicator they might stay independent longer. Now that they are in the public markets even Adobe can buy a few shares. I just don't feel like the IPO event has brought any particular benefits to the consumer and Khan is incorrectly looking at post IPO stock price bounce as some kind of financial indicator that it was a better deal for the company.
    - alchemyzach 1y ago
      [flagged]
      - mattmcknight 1y ago
        I am trying to explore the ways in which the IPO, in particular, separate from the continued operation of the company, is evidence that blocking M&A is good. I have seen nothing from you supporting Khan's position that the IPO is vindication for blocking M&A. Her particular claim was that it was "a great reminder that letting startups grow into independently successful businesses, rather than be bought up by existing giants, can generate enormous value.” However, the IPO price was $700M less than the value the company was at three years ago, which, given opportunity costs and inflation, would not seem to be an indicator of enormous value being generated.
        boroboro4 1y ago
        The current market cap of Figma is around 60B if I read it correctly. Yes, not all of it was IPOd, but from purely this perspective it was hugely successful. But then it’s also unfair to compare this market cap as is, because I would expect Figma as separate entity will grow better than Adobe as a whole. Meaning that people who’ll hold Figma stocks right now have a chance to have better returns in a future.
        danielmarkbruce 1y ago
        The amount of money in the pockets of the owners (no matter who they are) is not what antitrust is about.
aurareturn 1y ago
1. Figma actually lost money because their acquisition price was higher than their shares sold in the IPO. 2. Yes, Figma luckily IPOed in an extremely hot market Getting a bit lucky doesn't mean this was a success overall. The conclusion has many more years to go before it gets written. Either way, I don't like the over reach by Lina Khan.
- adastra22 1y ago
  They lost money (sort-of) because the market cap was $700M less at IPO. The amount of shares sold in IPO is irrelevant. I said sort-of because the economics of this is more complicated. Investors lose their preferences when they sell in an IPO, so this is probably better for common stock holders.
  - Jolter 1y ago
    Who is “they”, who lost money? I don’t think 19.3 B is their current market cap, it’s only what was sold at the IPo. Anyway, 19.3 instead of 20 would have been no big deal IMO Adobe certainly lost money, because they have had to compete against the better product, so have been able to charge less for their own offering. And will presumably continue to do so until further notice. Any employees who would have been swiftly laid off after the acquisition should certainly be glad for this outcome. They still have jobs, and if there are layoffs after the IPO it will be less dramatic. If they had equity, they probably got a much better deal in an IPO, especially if they sold some of it off after the “pop”.
- franga2000 1y ago
  What do you mean over reach? It's the FTC's job to prevent consumer market consolidation. Adobe is already too big and they already abuse that to the detriment of consumers. Buying Figma would make that even worse. A company exists primarily to make things for consumers and the FTC ensures they do that fairly. The IPO, stock price and everything else is secondary.
  - aurareturn 1y ago

mattmcknight 1y ago

But how is the IPO a sign of success in that case?

alchemyzach 1y ago
because it means they stayed independent and didnt get absorbed by a major megacorp that is already notorious for trying to corner the market of an entire industry and then over-charging
- austhrow743 1y ago
  That’s unrelated to the IPO.
  - littlestymaar 1y ago
    How? A VC-backed company must have an exit path for its investors at some point, and this exit is either: - sell the company to a bigger player, reinforcing their dominant position (often close to monopolistic in tech). - go to IPO, keeping the company independence and fighting power concentration.
    - kgwgk 1y ago
      There is a third option. (According to some LLM that will remain unnamed Vungle, Wrike, and Acquia are textbook cases of direct VC‑backed startups being bought out by private equity without an IPO or corporate acquisition. Not verified.)
      - littlestymaar 1y ago
        That's true, but PE is negligible in tech. And if all you can rely on for exit is private equity then you'll end up with a tech scene as dynamic as the European one…
- roenxi 1y ago
  Figma is a web app. Web apps are fundamentally a hyper-competitive market because literally anyone can just throw something up on the internet if they think there is a need for it. The risk here of Adobe overcharging for it is rather low - someone would build a cheap clone. People keep coming up with theories that companies are about to corner the market then over-charge, but the theories vastly outnumber the cases where it ever happens in practice. It is almost always that the biggest companies in the market are just more competitive (lower prices or higher quality) than all the others.
  - 9dev 1y ago
    That is not what would happen. Figma has built a huge moat through its brand by now, and most customers would continue to use it; some of them probably already have an Adobe subscription anyway, so Adobe would naturally try to make it easier or more integrated for these customers. A clone would need to start from scratch and compete against a huge corporation with virtually unlimited funds. > It is almost always that the biggest companies in the market are just more competitive (lower prices or higher quality) than all the others. That is almost always not what is happening. The big players extinguish any would-be competition early by buying them or throwing sticks into their wheels. They can afford to strategically make a loss in a given area to underbid the competition by overcharging in others, or relying on synergies. There are numerous examples where small teams built highly qualitative alternatives to corpo stuff, but had to compete against the network effects and brand names instead.
- mattmcknight 1y ago
  They were independent the whole time and it wasn't considered a success. I suppose IPO is an indicator they might stay independent longer. Now that they are in the public markets even Adobe can buy a few shares. I just don't feel like the IPO event has brought any particular benefits to the consumer and Khan is incorrectly looking at post IPO stock price bounce as some kind of financial indicator that it was a better deal for the company.
  - alchemyzach 1y ago
    [flagged]
    - mattmcknight 1y ago
      I am trying to explore the ways in which the IPO, in particular, separate from the continued operation of the company, is evidence that blocking M&A is good. I have seen nothing from you supporting Khan's position that the IPO is vindication for blocking M&A. Her particular claim was that it was "a great reminder that letting startups grow into independently successful businesses, rather than be bought up by existing giants, can generate enormous value.” However, the IPO price was $700M less than the value the company was at three years ago, which, given opportunity costs and inflation, would not seem to be an indicator of enormous value being generated.
      - boroboro4 1y ago
        The current market cap of Figma is around 60B if I read it correctly. Yes, not all of it was IPOd, but from purely this perspective it was hugely successful. But then it’s also unfair to compare this market cap as is, because I would expect Figma as separate entity will grow better than Adobe as a whole. Meaning that people who’ll hold Figma stocks right now have a chance to have better returns in a future.
        danielmarkbruce 1y ago
        The amount of money in the pockets of the owners (no matter who they are) is not what antitrust is about.

aurareturn 1y ago

1. Figma actually lost money because their acquisition price was higher than their shares sold in the IPO. 2. Yes, Figma luckily IPOed in an extremely hot market Getting a bit lucky doesn't mean this was a success overall. The conclusion has many more years to go before it gets written. Either way, I don't like the over reach by Lina Khan.

adastra22 1y ago
They lost money (sort-of) because the market cap was $700M less at IPO. The amount of shares sold in IPO is irrelevant. I said sort-of because the economics of this is more complicated. Investors lose their preferences when they sell in an IPO, so this is probably better for common stock holders.
- Jolter 1y ago
  Who is “they”, who lost money? I don’t think 19.3 B is their current market cap, it’s only what was sold at the IPo. Anyway, 19.3 instead of 20 would have been no big deal IMO Adobe certainly lost money, because they have had to compete against the better product, so have been able to charge less for their own offering. And will presumably continue to do so until further notice. Any employees who would have been swiftly laid off after the acquisition should certainly be glad for this outcome. They still have jobs, and if there are layoffs after the IPO it will be less dramatic. If they had equity, they probably got a much better deal in an IPO, especially if they sold some of it off after the “pop”.
franga2000 1y ago
What do you mean over reach? It's the FTC's job to prevent consumer market consolidation. Adobe is already too big and they already abuse that to the detriment of consumers. Buying Figma would make that even worse. A company exists primarily to make things for consumers and the FTC ensures they do that fairly. The IPO, stock price and everything else is secondary.
- aurareturn 1y ago