171–180 of 414 posts
> Permira, the global private equity firm current Squarespace users about to get gouged
The gold rush is over - private equity is going to squeeze every little drop from the companies that have been built and we will move on to Web 3.0 - which will be just like web 1.0 - self-hosting, link directories, newsletters, and guestbooks.
If there's going to be a web 1.0 revival, maybe it needs to jump straight to version 5 to leave enough of a gap from the taint of blockchain...
It 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…
I hear that PE destroys products and culture to make money at all costs, but i don’t get how that can net them back the >$6 billion they paid for a company with <$300 million yearly revenue and negative profit.
[1] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001496963/d08174f...
> Permira, the global private equity firm current Squarespace users about to get gouged
I have an existing blog on Blogger and have no need for ecommerce or a lot of business stuff. It's basically a home page and a blog. I came to the conclusion I should just leave things as they are and maybe add a second blog for a different purpose.
It's free and if it becomes a problem, I'll deal with it when it does.
I hear that PE destroys products and culture to make money at all costs, but i don’t get how that can net them back the >$6 billion they paid for a company with <$300 million yearly revenue and negative profit.
Mainly when I look at this, I think "it doesn't seem like its that easy to make money in PE these days." Maybe in the 80s there were lots of large corporations that were so poorly run that you could buy them with debt, cut costs, and make lots of money (see RJR Nabisco/Barbarians at the Gate, that was a terribly run company). But in regards to this deal, someone raised $6B, had to find a place to put it, and found the pickings were pretty slim.
Still, someone apparently thinks they can cover the debt service with the cash flow.
https://investors.squarespace.com/news-events-financials/inv...
I hear that PE destroys products and culture to make money at all costs, but i don’t get how that can net them back the >$6 billion they paid for a company with <$300 million yearly revenue and negative profit.
I think they just load up on debt, so they aren't really buying it with their money. But what I don't understand is how they get people to loan them money when they know that they are just going to strip mine the company for all valuable assets and leave a shell of a company for the lenders to fight over.
In other words, it's a great time to build the next Squarespace.
There's Wix, Webflow, and others already. Seems pretty crowded.
Earlier quoted context omitted.
I think they just load up on debt, so they aren't really buying it with their money. But what I don't understand is how they get people to loan them money when they know that they are just going to strip mine the company for all valuable assets and leave a shell of a company for the lenders to fight over.
> how they get people to loan them money when they know that they are just going to strip mine the company Because on average, target firms of leveraged buyouts become more productive [1]. That lets them pay back shareholders and lenders in most cases. The reason public perception is off is the size effect and availability heuristic. The first shows that big deals do badly [2]. The second means the last widely-report…
Earlier quoted context omitted.
They gonna increase prices
not just increase prices but likely saddle the company with mountains of debt (which happens to be owned directly or indirectly by the PE firm). red lobster acquired by Golden Gate PE in cash deal in 2020 [1] red lobster subsequently squeezed for any value at all costs (cuts in labor, switching suppliers) [2] [1] https://www.restaurantbusinessonline.com/financing/asian-inv... [2] https://www.cnn.com/2024/05/03/food/r…