I knew this was their plan as soon as they pivoted away from the "club" business model.
Damn shame, I was hoping to maybe apply there at some point.
Confirmed: Walmart buys Jet.com for $3B in cash
41–50 of 268 posts
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#42I really hope Walmart doesn't scrap the Jet Anywhere cash back program [0]. It seems not well known and somewhat controversial, but offers generous rates higher than everywhere else. For example, 4.8% from Expedia, 5.6% from Orbitz. Unlike every other cash back program they do not cap the amount for flights. JetCash is effectively real cash because many items are available cheaper than even from Walmart, Amazon, or C…
If they were taking a loss on those items, isn't it practically a guarantee that they were doing that with VC money in order to grow their customer base either to build a sustainable business later or make them a more attractive acquisition target? Either way, I wouldn't expect it to continue. Not even after a normal acquisition, and certainly not from WalMart. WalMart (in)famously pinches every penny; they don't sustain money-losers.
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#43What's the likely scenarios for an employee whose been there for 2 years, an employee whose been there for 1 year, and an employee whose been there for 6 months? If we assume 1 year cliff on options.
The short answer is that it's very hard to know as Jet was a fairly unusual company. They raised (and spent) a tremendous amount of capital and it's not generally known what terms those raises were done on.
If the terms were favorable (standard preferred stock) the employees likely made several billion dollars (in aggregate) on the deal. If the terms were not favorable the employees could have made relatively little. You'll note that some other people in this thread are assuming various liquidation preferences just to validate their priors (employees always get screwed) with no real evidence to support their claims.
One way to look at it however is to consider the question "What is Walmart buying in this deal?" From my perspective they're not really buying a pile of code or a customer base or a brand name (none of that seems this valuable). What they are really buying is an energized and engaged team working until the leadership of a reportedly excellent CEO. They hope that this team will do a lot to help Walmart to capture a larger share of the future of e-commerce (where Amazon is clearly kicking their ass at the moment). So if a lot of the asset Walmart is buying is the people then it would't be an effective purchase if most of those people got screwed as part of the sale. This is just speculation on my part but I think it makes logical sense.
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#44What's the likely scenarios for an employee whose been there for 2 years, an employee whose been there for 1 year, and an employee whose been there for 6 months? If we assume 1 year cliff on options.
Great question. The answer is the same for all of them: roughly 0. Jet's last valuation was $1.6bn and it was, and continues to, burn cash like crazy. Investors aren't dumb, they see that. So they add a terms to their investment whereby they guarantee a return on their investment. For a company that needs hundreds of millions of dollars and is trying to beat Amazon? Let's say 3x. That means that if I put in $100m dol…
> For a company that needs hundreds of millions of dollars and is trying to beat Amazon? Let's say 3x.
Jet.com raised its A, A1, B1 and B2 with 1x liquidation preferences. Common will get a pay-out.
Since all of Jet's preferred stock is non-participating, their holders will probably receive a dividend, convert to common and then participate alongside everyone else. (All Jet preferred stockholders get an 8% dividend except A1, who got a flat 48¢ per share, so that's a bonus $45 or so million to preferred.)
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#45In cash? Really?
You know it won't be unlabelled suitcases filled with cash right?
Of course not, it will be a very large novelty check. /s
But why cash or at least 100% cash? Just seems weird to me that at least some of it wasn't in stock. Is it because Jet was still private, so any stock in the deal would have been immediately liquidated by the VCs?
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#46What's the likely scenarios for an employee whose been there for 2 years, an employee whose been there for 1 year, and an employee whose been there for 6 months? If we assume 1 year cliff on options.
Very much napkin math, take with salt: $3b purchase price + $300m in Walmart options The company raised $500-800m at at least a $1b valuation, no idea on later round(s), seem less reported, maybe a downish round? Investor liquidation preference guarantees investors get their money back 1x or 2x or 3x or whatever (assuming they don't lose all of it). So if they raised at a $1b valuation, sell for $3b, a 2x preference…
> Investor liquidation preference guarantees investors get their money back 1x or 2x or 3x or whatever (assuming they don't lose all of it).
I haven't looked into the walmart/jet deal but one hangup on this assumption is very often the entity purchasing was the entity that invested initially in the first place (directly or indirectly).
That is they are just moving money around and buying something they already own (either directly or indirectly and in some cases very very indirectly).
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#47I really hope Walmart doesn't scrap the Jet Anywhere cash back program [0]. It seems not well known and somewhat controversial, but offers generous rates higher than everywhere else. For example, 4.8% from Expedia, 5.6% from Orbitz. Unlike every other cash back program they do not cap the amount for flights. JetCash is effectively real cash because many items are available cheaper than even from Walmart, Amazon, or C…
For a more comprehensive listing of cashback programs, try using Cashbackholic [0]. You type in the store you're buying from and it lists almost every cashback program that offers additional cashback on that store.
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#48Earlier quoted context omitted.
They're not just buying a pile of code. They're also buying an energized and engaged team that they hope will be able to modernize Walmart's ecommerce systems. They wouldn't have gotten that if they had purchased a broken failure of a company somewhere down the road.
Doesn't Walmart already have pretty decent tech? I recall seeing some impressive scalability blog posts from the team st "Walmart labs."
Yeah Walmart labs is quite progressive. They're very active in the clojure community and do some interesting work.
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#49Jet.com ran a contest where they gave 100,000 shares as the top prize for the most signup referrals. This Guy is probably one happy guy right now. He spent $18k and the value of those stocks are probably worth in the millions.
http://www.businessinsider.com/jet-insiders-referral-program...
Re: Confirmed: Walmart buys Jet.com for $3B in cash
#50It's funny how everyone was saying that Walmart would never pay $3B https://news.ycombinator.com/item?id=12218654
It ain't HN without some good ol' cynicism.