I don't understand how capitalism works now. So can people just forcibly buy stocks from you for $44 now?
Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
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Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#62This makes the Google registrar change even worse. I need to get my act together and transfer my .dev domain. :/
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Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#63Has 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?
The current state of the markets and private equity is deeply troubling. Gone are the days when companies like Microsoft went public at reasonable valuations, allowing everyday investors to participate in their massive growth. Now, companies like Uber and Airbnb debut on the stock market at sky-high valuations, leaving little room for the average investor to profit.
Worse still, the concentration of wealth has enabled large private equity firms to gobble up what were once thriving small businesses across various industries - from veterinary clinics to engineering firms. This trend stifles entrepreneurship and limits opportunities for employees to rise through the ranks and become owners themselves.
America has lost half its public companies since the 1990s. The count of publicly listed companies traded on US exchanges has fallen substantially from its peak in 1996. Back then, the number exceeded 8,000 companies. Today that count has dropped by more than 50% to just 3700 [1].
[1] https://www.cnn.com/2023/06/09/investing/premarket-stocks-tr...
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#64It 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.
They were already public, they could have cashed out already at a good sized chunk of this. The yachts were already within reach.
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#65Earlier quoted context omitted.
Yeah slash equity grants for engineers by 20%, and then move into maintenance mode.
They'll recap the company, at the expense of IC grants.
Does that mean dilute the cap table and then suddenly the PE shares are equivalent to like 4 employee shares or something? Or the PE shares have some special dividend that the employee ones do not?
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#66It 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.
Going from their financials, Squarespace makes no money: Revenues of $281.1 million for Q1 with Net Income of $0.1 million so it can be rounded to $0. They have debt of $556.9 million so yes, for the founder being able to pass on this pig with lipstick is great.
Permira is well known for what was their management approach with AA in the UK, so for the employees this will probably mean massive layoffs soon.
https://www.theguardian.com/business/2007/feb/23/privateequi...
"MPs accuse owners of asset stripping AA motoring group" - https://www.independent.co.uk/news/business/news/mps-accuse-...
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#67I don't understand how capitalism works now. So can people just forcibly buy stocks from you for $44 now?
Acquisitions work the same as they always have. Roughly, if half the voting shareholders approve of the deal it will go through.
Edit: from the first result in Google:
> Casalena and long-term investors General Atlantic and Accel, which make up about 90% of the Squarespace’s voting shares, have agreed to vote in favor of the transaction.
So I guess the shareholders mentioned in the subheading of the linked press release own a majority.
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#68This makes the Google registrar change even worse. I need to get my act together and transfer my .dev domain. :/
This was my visceral reaction as well, but does it really make the change worse? There are tons of business that are private that are doing great. I host with OVH they are private, lots of the businesses I have worked for have been private. Candidly without the pressure of "this quarter" it might be a good thing for Squarespace.
private is not the same as private equity which typically means an external manager is extracting as much from the business as they can. Its often at the expense of longer term growth too.
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#69how 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
It was announced in mid-2023, and google sent out numerous emails to account holders over the last six months. https://support.google.com/domains/answer/13689670?hl=en Feel free to migrate your domains somewhere else. I chose CloudFlare
>It was announced in mid-2023
The Squarespace acquisition of Google domains was announced, yes.
I don't recall seeing anything about Squarespace immediately going private and being beholden to an investment firm showing up in those emails.
>Feel free to migrate your domains somewhere else.
Thanks for the permission, that's exactly what I and I'm sure many others are about to do. Too bad the timing of this announcement is days after the migration from Google to Squarepspace, so I'm not actually allowed to migrate my domain for 60 days :)
Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
#70It 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.
Imagine ranking all the shareholders of the company. For each, you've asked them how much you'd have to give them to convince them to sell.
At the top of the list would be the one who is the most interested in selling, and thus is willing to take the lowest price. At the bottom of the list would be the person who is the least interested in selling, and is demanding the highest price.
In order to buy one share you ask the guy at the top of the list. But to get the whole company you need the guy at the bottom of the list to agree too.
That's definitely not a perfect analogy at all, there's more subtlety than that. But it accurately describes the underlying dynamic.
For the stock market quote, you're always talking about the guy at the top of the list.