JustFab is on the cutting block too
Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
21–30 of 41 posts
Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#22$271MM in investment and a $250MM purchase price. https://www.crunchbase.com/organization/gilt-groupe#/entity Does that mean that the investors got all the money and anyone holding common stock was basically screwed?
Yes. The preferred will get the payout. If there were any holders of debt (which is senior to preferred -- his is why the yield on preferred shares of mega corps are higher Than the company's bonds), they will get paid before the preferred. Execs will renegotiate their compensation contracts with the acquirer and likely have fairly lucrative contracts (often happens to sweeten the deal).
It's not so much to "sweeten the deal" as it is to make sure the execs don't flee, leaving the acquirer with an organization that they have no idea how to run.
Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#23Earlier quoted context omitted.
It has a time decaying value function. If the points accumulate rapidly upon submission, you can reach front page with as few as 5 up votes. This often happens for github repo submissions.
Does it stay on the front page with so few votes? This sounds trivially gameable by voting rings.
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Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#24Earlier quoted context omitted.
A 1x liquidity preference is standard, but it is common now to see larger multiples - especially in high-value later stage rounds, where the preference to those investors would also be stacked before earlier investors. So, yes, I doubt common holders got much here, it is also possible that earlier investors didn't get much either. For founders and employees this is usually made up with a separate bonus or earn-out fr…
I am in a similar situation in another acquisition and would love to receive your feedback, mainly if we (the common stockholders) should make a "sanity check" with a lawyer or completely forget about the issue. The company was acquired recently and has some debt, so they returned money to the preferred stockholders, our common stock "was cancelled and extinguished" and one of the directors received 1 million.
Matt has covered it in his reply which i'll second - there isn't a lot you can do. The people affected tend to talk about it, which is why you hear these stories a lot.
I've been surprised by the number of exits that are portrayed as 'successful' in the media actually left founders and employees with little or nothing after preferences.
Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#25They were purchased by Hudson's Bay Company, which was founded in 1670. It almost seems anachronistic to see a historical institution from the 17th century buy up a hyped tech company.
TechCrunch's front page headline for this is "Gilt Gets Acquired For $250M by Saks Fifth," which wouldn't be as interesting and isn't even accurate since Saks is just another HBC subsidiary. This is like if the East India Company bought Groupon.
Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#26Amazon has such a commanding lead over everyone in ecommerce, it's going to take more than scale to beat them out.
Amazon has merely a slice of ecommerce. They have a commanding lead only in their type of ecommerce: being the new age Walmart of the Web. That leaves room for the other 80% of the market (in Walmart's case, they couldn't dominate most categories eg: dollar stores, Target, Costco, Home Depot, paint stores, convenience stores + gasoline, banking, pharmacy, clothing, tens of thousands of boutiques, grocery stores, Macy's & upscale, jewelry, video games, electronics, liquor stores, and on and on).
You have to do what Amazon isn't doing. Ultimately as ecommerce doubles in size in the US over the next ten years, Amazon is not going to get most of that. It's a staggering opportunity in terms of scale.
They couldn't beat eBay at auctions. They couldn't beat Craigslist at classifieds. They can't beat Priceline or AirBnB. They couldn't beat Google at search. They couldn't beat Apple at phones. They won't own online restaurant ordering. They will probably fail at trying to own services (Angie's List, legal, health, whatever). Amazon is going to lose in most things not directly tied to what they do today.
Amazon's inability to dominate the other 80% of ecommerce, is your opportunity.
Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#27It already makes me feel a bit old to remember the days when Gilt, Fab, LivingSocial, and Groupon were all riding hot as variants of discount deals and but one by one have fallen from grace.
Back in the 1990s, people seemed to constantly talk about "Internet time." Referring to the sense that a year online, seemed like forever - especially given most people had spent very little time online, the Web was expanding at a rate essentially never seen before, there was little to compare it to historically, it all seemed to change a lot in one year. It still sometimes feels like the Internet time effect, when you refer to the brief era of Groupon's boom - it seems like it was a decade or more ago, when it was just three to four years.
Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#28Earlier quoted context omitted.
It has a time decaying value function. If the points accumulate rapidly upon submission, you can reach front page with as few as 5 up votes. This often happens for github repo submissions.
Does it stay on the front page with so few votes? This sounds trivially gameable by voting rings.
No, it'll melt and quickly fall off the front page if it doesn't get more votes in an appropriate amount of time.
It's not trivial to game over time. HN has been very successfully handling attempts at gaming for years. If it didn't, the site wouldn't function at all given its traffic, it would be overwhelmed with crap 24/7.
Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#29This is OT but how come submissions which have less than 12 points appear on the first page? Has anyone figured out the HN algo? There are many other posts with far greater points yet this appears. Maybe techcrunch has higher ratings?
Notably, the user that posted the article has 47,000+ karma. I imagine that's a factor
Speaking as a user with 37,000+ karma, no, not that I am aware of.
Re: Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M
#30Earlier quoted context omitted.
A 1x liquidity preference is standard, but it is common now to see larger multiples - especially in high-value later stage rounds, where the preference to those investors would also be stacked before earlier investors. So, yes, I doubt common holders got much here, it is also possible that earlier investors didn't get much either. For founders and employees this is usually made up with a separate bonus or earn-out fr…
I am in a similar situation in another acquisition and would love to receive your feedback, mainly if we (the common stockholders) should make a "sanity check" with a lawyer or completely forget about the issue. The company was acquired recently and has some debt, so they returned money to the preferred stockholders, our common stock "was cancelled and extinguished" and one of the directors received 1 million.
Golden parachutes are pretty common. It's a way of aligning company leadership financial interests with stockholders. The legality is highly dependent on specifics. If there is a lot of money at stake, I'd talk to a lawyer.