Earlier quoted context omitted.
I feel terrible and I’m transferring everything elsewhere immediately.
where to?
Cloudflare for the domains that it supports.
Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
31–40 of 414 posts
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#32It must be nice for the founder to pocket $2 billion in cash from selling his company. For users, on the other hand, I'll hardly trust a PE firm with a SaaS product. There's just too much incentive to jack up prices to service the debt taken to acquire Squarespace, and cut costs on customer support and building new features.
>There's just too much incentive to jack up prices to service the debt taken to acquire Squarespace, and cut costs on customer support and building new features.
So what's the best ownership structure? Public companies have their issues (short-term thinking), acquisitions have their issues (getting closed down)...
I mean, cutting costs and upping prices isn't awesome for the customer, but do you have more faith in a company that's scraping by versus working to be profitable?
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#33Has the trend of PE owning things increased in the last decade? Has PE gotten more money in the past years so that they can hoover up companies?
For a more long-form answer to your question, I recommend checking out "Plunder - Private Equity's Plan to Pillage America" by Brendan Ballou [0]. He gives some insights into the tactics used by private equity firms to acquire, gut, and destroy existing companies and profit by doing so.
Refs: 0: https://www.plunderthebook.com/
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#34It must be nice for the founder to pocket $2 billion in cash from selling his company. For users, on the other hand, I'll hardly trust a PE firm with a SaaS product. There's just too much incentive to jack up prices to service the debt taken to acquire Squarespace, and cut costs on customer support and building new features.
Yeah. Sounds like the beginning of the end for Squarespace. Grats to the owners for cashing out, though, hope they enjoy their yachts.
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#35It is interesting how most M&A transactions trend to have a 30% premium above the trading price. I have tried to investigate why but could not find a good explanation to why this number is so prevalent.
The other replies explain the 30% with circular reasoning and I don’t find them convincing, so here’s a more absolute and testable hypothesis: at the average rate of S&P500 return adjusted for inflation, 30% is about 3-5 years of investment. What if that’s the average period of investment (i.e. time between buy and sell) for a typical retail investor for any given stock?
If that’s the case, 30% is the minimum premium at which not only are you speedrunning returns for existing investors, you’re also doing it for the average person who was going to invest in Squarespace today.
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#36Earlier quoted context omitted.
What R&D was Squarespace doing over the last 10 years?
All software companies have R&D going on constantly. “How do I push this user metric” “How do we increase conversion” “How can we increase conversion for our customers” “Can square space be easier to use”
>All software companies have R&D going on constantly.
I think the question is more like, "what is Squarespace innovating on that we're afraid of losing under new ownership?"
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#37It is interesting how most M&A transactions trend to have a 30% premium above the trading price. I have tried to investigate why but could not find a good explanation to why this number is so prevalent.
It’s probably just a good rule of thumb. 10%? Go away. 20%? You can certainly negotiate it up to 30%. 30%? There’s considerable value here, and threats to walk away will be felt. 40%? Why, when you can get it to 30%?
Why is that a better rule of thumb than, e.g. 5%/10%/15%/20%?
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#38Earlier quoted context omitted.
PE realises you can fire most of the team and stop R&D, jack up prices by 50-100% due to lock in, and have something low risk that returns like four times bonds.
What R&D was Squarespace doing over the last 10 years?
https://www.squarespace.com/refresh
It's not like they've been sitting on their hands
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#39This makes the Google registrar change even worse. I need to get my act together and transfer my .dev domain. :/
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#40how odd, all my google domains just transferred to squarespace today. now thru no consent of my own all my domain and payment information are belong to this private equity shop i dont know anything about that is also likely to strip it for parts. idk how to feel about that
Don't forget the sharing of portco data which leads to you getting targeted offers from all of the other Permira companies like McAfee, Ancestry.com, Klarna, and FlixBus