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

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

#141

Post by __derek__ »

rogerdpack wrote: post #92

I figured out what is going on here. Walmart thinks to themselves "we want to be like amazon, we want to be huge online" and then jet comes along and is something of an almost competitor to amazon, so corporate thinks "oh we should snap this up" but...my gut reaction here is this is going to be a terrible deal for walmart, what are they going to do, keep dumping $500M/yr for it at a loss or what? Pretty desperate, bu…

Walmart.com has much higher sales than Jet. It already is huge online, even if it's not Amazon huge. If anything, this is about pruning competition and buying potentially useful IP.

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

#142

Post by Maarten88 »

rogerdpack wrote: post #92

I figured out what is going on here. Walmart thinks to themselves "we want to be like amazon, we want to be huge online" and then jet comes along and is something of an almost competitor to amazon, so corporate thinks "oh we should snap this up" but...my gut reaction here is this is going to be a terrible deal for walmart, what are they going to do, keep dumping $500M/yr for it at a loss or what? Pretty desperate, bu…

> keep dumping $500M/yr for it at a loss or what?

I think building Amazon wasn't cheap too. Amazon made losses for most of two decades straight, so Walmart dumping massieve money into building a competitor, with the insights of today, might still be cheap, relatively.

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

#143

Post by nugget »

djrogers wrote: post #60
dave_sullivan wrote: post #32

Earlier quoted context omitted.

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…

> $10m is probably best case scenario (after taxes, you can afford a pretty nice place in the Bay Area and have some left over) That's an extreme overstatement - a 'pretty nice place' in the bay area would cost in the $1M range, maybe $2M if you have a pretty jaded view of 'pretty nice'. > you just made a million bucks, which will be about 700k after taxes. More like 500K - 39.6% federal and up to 12% CA state tax.

CA state income tax goes up to 13.3% (for >$1 million), it's 12.3% on taxable income of $526,444 up to the $1m threshold. There's also the ACA medicare tax of 3.8% on investment income (which applies to employee options) which kicks in if AGI is >$250k for Married Filing Jointly, >$125k for a single person. You can itemize and deduct state taxes paid (for now - some proposals to weaken or eliminate this), which cuts the effective CA state rate by your top marginal Federal rate (.396+.038=.434). Net net an employee making $1m from employee options (above and beyond a healthy base salary) resident in CA will pay about 50% in taxes between Fed and State. The #s in NY and NJ are a couple % less. I would support the ability for an employee to ''smooth out'' the tax liability of option value accrued over working many years, say for example by recognizing the income over 3-5 years (thus taking advantage of lower tax brackets), but I've never heard this seriously discussed by legislators.

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

#144

Post by exclusiv »

rogerdpack wrote: post #92

I figured out what is going on here. Walmart thinks to themselves "we want to be like amazon, we want to be huge online" and then jet comes along and is something of an almost competitor to amazon, so corporate thinks "oh we should snap this up" but...my gut reaction here is this is going to be a terrible deal for walmart, what are they going to do, keep dumping $500M/yr for it at a loss or what? Pretty desperate, bu…

Jet.com is a disaster of a company fundamentally.

However, it does make sense for a company like Walmart. I don't know about 3B, but Jet is a drastically cooler brand for them in their ecommerce battle esp. among millenials.

Jet was previously fulfilling many orders from Walmart and now they can build a seamless integration to deliver competitively priced items quickly from the stores.

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

#145

Post by Zombieball »

KenCochrane wrote: post #49

Jet.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...

I wonder what the specifics are. It says "stock options" in the linked article and "He'll be able to vest or exercise his stock options if Jet ever goes public or sells to another company."

I always hear stories about early stage employees getting the short end of the stick during acquisitions. Could there be a chance that this acquisition ends up not in his favor and he is out $18k?

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

#146

Post by losteverything »

throwaway324328 wrote: post #105
chatmasta wrote: post #34

Earlier quoted context omitted.

Doesn't Walmart already have pretty decent tech? I recall seeing some impressive scalability blog posts from the team st "Walmart labs."

(Throw away for obvious reasons) It is all total crap. We dumped a bunch of time and money into rebuilding everything as SOA and on all the latest technologies. Most of the work was done by an army of Indians that couldn't get jobs elsewhere in the valley. Absolutely nothing scales. We have more servers in total than peak users to the site, and still can't get any respectable performance numbers. The few smart people…

Absolutely nothing scales

Maybe that is the réal reason Doug bought it.

From your perspective is .com able to grow (handle growth) from tech. Stand point??

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

#147

Post by tommynicholas »

asmithmd1 wrote: post #30
tommynicholas wrote: post #16

Earlier quoted context omitted.

It would have to be much more than 2x - 2x would still have no impact because the acquisition was 2x the price of the last round.

You are right. I took a quick look at the cap table on CrunchBase and there is lots of smart money in it. It is definitely a win for the investors but how much of a win for common share holders is up to how hard the CEO fights for them.

So true!

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

#148

Post by cloudjacker »

Zombieball wrote: post #145
KenCochrane wrote: post #49

Jet.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...

I wonder what the specifics are. It says "stock options" in the linked article and "He'll be able to vest or exercise his stock options if Jet ever goes public or sells to another company." I always hear stories about early stage employees getting the short end of the stick during acquisitions. Could there be a chance that this acquisition ends up not in his favor and he is out $18k?

It is possible.

There was a subsequent 350m round in November so that means dilution for everyone.

So that, coupled with liquidity preferences for the venture investors, could mean he didn't get much.

He likely does have cash as well as shares in Walmart from this deal, but I doubt he made "millions" from this, and it is entirely possible he is close to breakeven (just as possible that he has a six figure amount). But we don't have any transparency from this.

This is the kind of gambling the society puts you on a pedestal for, so don't worry too much about the bet. Its a "good" one.

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

#149

Post by [deleted] »

rogerdpack wrote: post #92

I figured out what is going on here. Walmart thinks to themselves "we want to be like amazon, we want to be huge online" and then jet comes along and is something of an almost competitor to amazon, so corporate thinks "oh we should snap this up" but...my gut reaction here is this is going to be a terrible deal for walmart, what are they going to do, keep dumping $500M/yr for it at a loss or what? Pretty desperate, bu…

[deleted]
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