Confirmed: Walmart buys Jet.com for $3B in cash • Hacker News Board

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#81

Post by rb808 » Mon, Aug 08, 2016, 3:46 PM UTC

WhitneyLand wrote: post #12

Is anyone here using Jet on a regular basis? I tried it once a few months back and dismissed it as nothing innovative enough to be a sustainable Amazon competitor. I must have been very wrong. I don't see how Jet justifies 3B from Walmart. I will credit them on one point - They do seem have great employee sat that is a result of investing lots of time and energy to create a healthy environment.

I use Jet on a regular basis. I try to avoid Amazon wherever possible, they're good but they have too much power so I try to help any alternative. Their selection isn't as good as Amazon, but usually it arrives quicker. Books are not quick, but cheaper than BN (even though BN ships them)

They must be burning lots of cash though. I placed a $100 order with about 7 items and it came in 6 different boxes.

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#82

Post by tedmiston » Mon, Aug 08, 2016, 3:47 PM UTC

ikeboy wrote: post #63

tedmiston wrote: post #39

I 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…

They cap the total you can get in a year at $1000.

Most (all?) programs have a global cap. Where this one is unique is lack of per transaction caps.

A $2k roundtrip ticket gets you flat $2.25 from Orbitz [0], or $112.00 from Jet.

To hit $1k per year off the 5.6% rate is ~$18k spent on flights & hotels. I think most people won't come close.

[0]: http://www.ebates.com/coupons/orbitz/index.htm

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#83

Post by tedmiston » Mon, Aug 08, 2016, 3:50 PM UTC

Analemma_ wrote: post #42

tedmiston wrote: post #39

I 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 sus…

It's hard to tell because their pricing strategy is so complicated with the dynamic discounts based on quantity, what else is in your cart, paying by debit card vs credit card, etc.

The items that were cheaper than Costco weren't way cheaper, maybe 5–10% less, so I considered that they may have some kind of higher level membership that I don't know about.

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#84

Post by rogerdpack » Mon, Aug 08, 2016, 3:51 PM UTC

ffggvv wrote: post #5

It's funny how everyone was saying that Walmart would never pay $3B https://news.ycombinator.com/item?id=12218654

Never underestimate the dumbness of walmart corporate LOL

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#85

Post by tedmiston » Mon, Aug 08, 2016, 3:52 PM UTC

wheaties wrote: post #2

I have to wonder if the employee stock options were worth anything? Most telling is that Walmart decided to throw ~$300M at the founders "and others" to retain them. Does that mean, in this case, that the founding team is the only one who walks away with a payday? And to be clear, this isn't a cynical musing. I'm genuinely curious to see how this worked out for them.

It's important to consider that sometimes these acquiring company stock options come with additional vesting attached to them. It can be time based + milestone based.

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#86

Post by xur17 » Mon, Aug 08, 2016, 3:54 PM UTC

WhitneyLand wrote: post #12

Is anyone here using Jet on a regular basis? I tried it once a few months back and dismissed it as nothing innovative enough to be a sustainable Amazon competitor. I must have been very wrong. I don't see how Jet justifies 3B from Walmart. I will credit them on one point - They do seem have great employee sat that is a result of investing lots of time and energy to create a healthy environment.

I have been using them more and more lately for random household essentials, since their prices beat Amazon a lot of the time, and shipping is typically 2-days, which is pretty good.

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#87

Post by rogerdpack » Mon, Aug 08, 2016, 3:55 PM UTC

ryandrake wrote: post #58

tyre wrote: post #33

Earlier quoted context omitted.

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…

If no employees get anything, why wouldn't they organize and threaten to quit together (leaving Walmart buying the name, a founder or two and some technology with nobody to run it) to try to stop the deal? Isn't the whole idea of accepting 1/2 salary at a start-up because of your glorious equity? Whenever I hear about these "deals" where employees end up with nothing or close to nothing, I wonder what they are thinki…

Seemed like the founder worked hard to make it a nice place to work. Maybe they just like working there? :)

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#88

Post by tedmiston » Mon, Aug 08, 2016, 3:55 PM UTC

WhitneyLand wrote: post #12

Is anyone here using Jet on a regular basis? I tried it once a few months back and dismissed it as nothing innovative enough to be a sustainable Amazon competitor. I must have been very wrong. I don't see how Jet justifies 3B from Walmart. I will credit them on one point - They do seem have great employee sat that is a result of investing lots of time and energy to create a healthy environment.

I use them regularly. Mostly for items that are cheaper than from Amazon. Also with money from their cash back program, Jet Anywhere.

I would suspect one portion of it is their dynamic pricing model. I wish there were more info publicly available about the mechanics.

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#89

Post by elbasti » Mon, Aug 08, 2016, 3:55 PM UTC

vessenes wrote: post #68

elbasti wrote: post #55

Earlier quoted context omitted.

Pretty cool. While this is almost certainly in violation of general solicitation SEC regulations, I doubt there would be any action taken by the regulator. The surprising part is that Jet.com's legal department let this fly.

Why would this violate? They are giving a reward, no value implied or stated.

In general, the unregistered "general solicitation" for the purchase of securities is prohibited. You can't go on TV and ask people to buy your stock in exchange for money unless you have registered to do so--an IPO or subsequent S1.

Stock is certainly a security. Stock options are just call options of a security, and also a security. Obviously there is some (future, conditional) value implied since it's a reward.

It doesn't really matter whether you are trading stock for dollars, or work, or fb likes, or whatever--it's still a general solicitation because they are being traded for something.

Caveat: I'm not a lawyer but I have been involved in startups in the space for many years.

Re: Confirmed: Walmart buys Jet.com for $3B in cash

#90

Post by mikhailt » Mon, Aug 08, 2016, 3:55 PM UTC

rdlecler1 wrote: post #29

I get why Walmart would buy them, but it seems to me they could have waited 6-12 months and bought the company for $300m. There's just no way they were showing growth. The only thing that makes sense is that Jet would have been damaged goods in 12 months and this was the only option for Walmart to build a millennial friendly competitor to Amazon.

Why couldn't they show growth?

Amazon is getting worse for non-prime users. They've increased their free shipping limit, longer shipments, and kept pushing their deals onto Prime users only.

I've bought more from Jet.com this year than Amazon in the last two years and Jet was faster with its free 2 day shipping than Amazon's free shipping.