Cisco Announces Intent to Acquire AppDynamics • Hacker News Board

Re: Cisco Announces Intent to Acquire AppDynamics

#31

Post by sulam » Wed, Jan 25, 2017, 4:11 AM UTC

nemo44x wrote: post #19

mathattack wrote: post #14

Earlier quoted context omitted.

Perhaps they had some insight that it wasn't going to be that strong? Public markets are very unforgiving if you have a few bad quarters. That 3.7B IPO could wind up a 2B company after a few of those. CISCO stock won't get crushed by a couple bad quarters from AppDynamics.

They've been increasing the initial offer price the last week as demand was high. From $10 to $14 a share. That's a positive sign for them. To then get bought out at 100% premium from that is massively prosperous exit. Consider their last private valuation was 1.9 billion it sounds like the investors, founders and employees all have reason to celebrate tonight. Congrats to them all for this very fortunate exit.

FWIW I was prepared to short the heck out of this stock at that valuation, so perhaps it's good for them to get the liquidity now vs after a few quarters in a rough market.

Re: Cisco Announces Intent to Acquire AppDynamics

#32

Post by sulam » Wed, Jan 25, 2017, 4:14 AM UTC

nemo44x wrote: post #25

inthewoods wrote: post #24

Earlier quoted context omitted.

Heard a rumor that there was a bidding war with Microsoft and IBM in the hunt so somehow 16x revenue makes sense.

Very interesting. Happy for them and if that rumor is true I'd expect New Relic to pop on that. Especially as their growth is as good, burn is less and have been well managed too.

At best this removes a potential suitor. If MSFT was trying to buy AppDynamics they may go after an alternative, but that's the only scenario where you revalue New Relic in light of this deal.

Re: Cisco Announces Intent to Acquire AppDynamics

#33

Post by bedros » Wed, Jan 25, 2017, 5:03 AM UTC

any advantage over open source apps like graphite

Re: Cisco Announces Intent to Acquire AppDynamics

#34

Post by explainthisth » Wed, Jan 25, 2017, 5:12 AM UTC

dmode wrote: post #29

atishd wrote: post #23

here's how the private investors did (roughly double returns to see at Cisco valuation): https://equityzen.com/path-to-ipo/appdynamics/ (disclaimer: i'm affiliated) good news for late stage companies, now that public-only investors know they have some competition.

Is there a way to figure out how well employees did in this deal ?

I can only guess, but the price is high enough that common share return probably = preferred share. Suppose you joined after the Jan 2013 round and took $100k of options over 4 years. Those options are now worth $640k. You probably made out better than you would have if you had worked at Cisco the whole time, but worse than if you worked for Google or Facebook. A good outcome! Considering that this is pretty far on the favorable end of the probability distribution, your expected value of joining a random startup with similar valuation is not so great.

Re: Cisco Announces Intent to Acquire AppDynamics

#35

Post by frik » Wed, Jan 25, 2017, 5:55 AM UTC

SteveNuts wrote: post #5

AlexB138 wrote: post #3

We just implemented AppDynamics. I can't say this hits me as good news. Hopefully Cisco is hands off with them.

How is AppDynamics compared to the other tools in your experience?

New Relic and AppDynamics are quite similar and best in class. AppDynamics offers not only a cloud version but also on-premise installation. AppDynamics still uses Flash in parts of the UI, and the UI is more old-school but shows more data details. New Relic has a more polished UI, older parts are typical Rails pre-web 2.0 pages, newer parts are AJAX heavy modern. AppDynamics shows a map of all network components, New Relic map is quite new and more like an afterthought. Both use agents for several programming languages. All other alternatives have far worse offerings (either only good for one language, worse detail level, even bigger costs or just very outdated software) - incl two Thoma Bravo owned properties, Dell, MS, CA, etc

AppDynamics would have been one of the first SV IPO in 2017. How many SV tech IPOs will we actually see in 2017?

Re: Cisco Announces Intent to Acquire AppDynamics

#36

Post by Eridrus » Wed, Jan 25, 2017, 6:02 AM UTC

inthewoods wrote: post #24

nemo44x wrote: post #18

Earlier quoted context omitted.

It's over 100% more than the 1.7 billion they were estimated to IPO at. That's a huge premium. And I might look at going long NEWR as their financials and prospects look the same and they're trading at 1.7b today.

Heard a rumor that there was a bidding war with Microsoft and IBM in the hunt so somehow 16x revenue makes sense.

Does AppDynamics have some appreciable lock in that would make Microsoft want to buy them, rather than compete?

Re: Cisco Announces Intent to Acquire AppDynamics

#37

Post by frik » Wed, Jan 25, 2017, 6:02 AM UTC

dmode wrote: post #8

Taxes, death, and Cisco acquiring a company..

Dell bought a competitor, Thoma Bravo investor bought two competitors. MS has some worse offering. As someone else mentioned MS and IBM were in a bid war with Cisco over AppDynamics. So will MS or IBM try to buy the public company New Relic or one of its competitors?

Re: Cisco Announces Intent to Acquire AppDynamics

#38

Post by oretoz » Wed, Jan 25, 2017, 6:28 AM UTC

tptacek wrote: post #6

AlexB138 wrote: post #3

We just implemented AppDynamics. I can't say this hits me as good news. Hopefully Cisco is hands off with them.

Cisco is usually pretty hands-off with companies, at least more so than other large acquirers. Google and Facebook acquire teams for talent, but have relatively well-planned product lines. Cisco has expansive product lines which it grows through acquisition. Very few Cisco products originate from within Cisco.

What you say might be true in a lot of cases but I know of one case (Ubiquisys) where they were not hands off probably because it was too close to their core business and also because they had a similar internal product.

Now Cisco have given up on the whole small cells idea. And a lot of it is because of their botched management practices and some of it is also due to Ubiquisys' own inefficiencies.

Re: Cisco Announces Intent to Acquire AppDynamics

#39

Post by fmela » Wed, Jan 25, 2017, 6:39 AM UTC

Eridrus wrote: post #36

inthewoods wrote: post #24

Earlier quoted context omitted.

Heard a rumor that there was a bidding war with Microsoft and IBM in the hunt so somehow 16x revenue makes sense.

Does AppDynamics have some appreciable lock in that would make Microsoft want to buy them, rather than compete?

For one, AppDynamics contracts are usually three years.

Re: Cisco Announces Intent to Acquire AppDynamics

#40

Post by r00fus » Wed, Jan 25, 2017, 6:54 AM UTC

argonaut wrote: post #9

AppDynamics looked like it was going to have a successful IPO, indicating a welcome market for future enterprise tech IPOs. Interestingly, it's in Cisco's best interest to have a cold IPO market.

It's questionable that any IPO this quarter would be hot. Lots of shadows and cold wind about.