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Vista Equity writes off PluralSight value, after $3.5B buyout

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Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#71

Post by rtpg »

Aurornis wrote: post #66
skywhopper wrote: post #42

Earlier quoted context omitted.

Essentially no company bought out by private equity manages to remain high-quality. The entire point is to milk the revenue stream dry while overleveraging on debt to provide investors with a large short-term payout. They do this by slashing costs to the bone, laying off too many people, and betting that the remaining husk will coast long enough to make the target return before they sell off what’s left to second-sta…

> Essentially no company bought out by private equity manages to remain high-quality. PE is a big category. Most PE-purchased companies are entirely boring and aren't imploding like these companies you hear about in the news. I know it seems like every PE backed company just explodes immediately because that's all we hear about in the news, but the selection bias of news stories means you're only hearing about the in…

Serious question: you have some examples of a company post-PE where you might say "this place still has quality?"

I guess that's a hard pitch in general, given people always complain. But there are some companies in the world whose image has improved over time, so maybe there are some PE companies that have righted the ship and where the brand does not feel like a shell of itself?

Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#72

Post by rtpg »

creativeSlumber wrote: post #24
blackhawkC17 wrote: post #5

> One source says that the Utah-based company's financials have improved, with a around 26% EBITDA growth in 2023, but not enough to service nearly $1.3 billion of debt that was issued when interest rates were lower. Pluralsight hasn’t failed entirely as a company. It’s just that it can’t produce enough profits to pay down the huge debt Vista took to acquire it. Many tech PE deals happened under low interest rates, b…

This is kind of sad. It was /is a functioning profitable public company with employees. A PE firm decides to take a huge loan to buy it, and now the company is gone. All those people lost their jobs. A huge net negative on the world and society because of greedy PE.

Leveraged buyouts just feel like something that should be plainly illegal. I know a bunch of wonks here will trip over themselves to try and justify it, but given how much of these kinds of transactions are basically "the directors just decide to empty the coffers"... at least tax it in a way that makes sense or something!

Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#73

Post by positr0n »

s1artibartfast wrote: post #57
acchow wrote: post #55

Earlier quoted context omitted.

Barring rent seeking and other anti-competitive behavior, all net profit is value creation.

Even rent seeking is value creation, just less than alternatives. No free exchange ever occurs unless the counterparties disagree on value, leading to a net gain post transaction.

The definition of rent seeking is manipulating the political environment to create new wealth for yourself without creating net wealth for society.

The classic example is the owner of a section of river imposing a toll for boats traversing the river. The rent creates value for the owner but exactly the same amount negative value for the rest of society.

A toll for a ferry the owner created would be creating wealth. As would developing a resort there.

Modern examples of rent seeking are usually related to regulatory capture or housing politics.

Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#74

Post by rchaud »

Aurornis wrote: post #66
skywhopper wrote: post #42

Earlier quoted context omitted.

Essentially no company bought out by private equity manages to remain high-quality. The entire point is to milk the revenue stream dry while overleveraging on debt to provide investors with a large short-term payout. They do this by slashing costs to the bone, laying off too many people, and betting that the remaining husk will coast long enough to make the target return before they sell off what’s left to second-sta…

> Essentially no company bought out by private equity manages to remain high-quality. PE is a big category. Most PE-purchased companies are entirely boring and aren't imploding like these companies you hear about in the news. I know it seems like every PE backed company just explodes immediately because that's all we hear about in the news, but the selection bias of news stories means you're only hearing about the in…

Most PE deals aren't in the $3.5b range nor are they in the mostly overvalued "software platform" category. Those are ripe for razing to the ground staff-wise.

Regardless, PE in general works on the basis of slashing costs first. When has that led to a better quality product?

Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#75

Post by mamonster »

rtpg wrote: post #71
Aurornis wrote: post #66

Earlier quoted context omitted.

> Essentially no company bought out by private equity manages to remain high-quality. PE is a big category. Most PE-purchased companies are entirely boring and aren't imploding like these companies you hear about in the news. I know it seems like every PE backed company just explodes immediately because that's all we hear about in the news, but the selection bias of news stories means you're only hearing about the in…

Serious question: you have some examples of a company post-PE where you might say "this place still has quality?" I guess that's a hard pitch in general, given people always complain. But there are some companies in the world whose image has improved over time, so maybe there are some PE companies that have righted the ship and where the brand does not feel like a shell of itself?

The most obvious example I can think of is Steinway. It was not a traditional PE shop buying it(at the time very famous hedge fund bought it for to reorg), but it is still a privately owned company and I've not heard anything bad about the pianos.

Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#76

Post by freddref »

CSMastermind wrote: post #70

I was a Pluralsight subscriber for about a decade before giving up on them in the face of declining quality and higher prices. My biggest disappointment was their pricing around Flow which I saw as their genuinely killer app - sort of like APM for your actual engineering team. But they priced it out of practicality for almost any organization.

Can you say more about flow?

I'm curious about practical use cases, could you share some examples?

Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#77

Post by achneerov »

rtpg wrote: post #71
Aurornis wrote: post #66

Earlier quoted context omitted.

> Essentially no company bought out by private equity manages to remain high-quality. PE is a big category. Most PE-purchased companies are entirely boring and aren't imploding like these companies you hear about in the news. I know it seems like every PE backed company just explodes immediately because that's all we hear about in the news, but the selection bias of news stories means you're only hearing about the in…

Serious question: you have some examples of a company post-PE where you might say "this place still has quality?" I guess that's a hard pitch in general, given people always complain. But there are some companies in the world whose image has improved over time, so maybe there are some PE companies that have righted the ship and where the brand does not feel like a shell of itself?

Yahoo is an example of this. They were bought out by PE Apollo in 2021 and they consolidated their businesses, such as selling the Japanese arm of their business. I still occasionally use Yahoo finance and it does not seem to have degraded to much and will is what I deem as having quality.

Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#79

Post by rawdeg »

freddref wrote: post #76
CSMastermind wrote: post #70

I was a Pluralsight subscriber for about a decade before giving up on them in the face of declining quality and higher prices. My biggest disappointment was their pricing around Flow which I saw as their genuinely killer app - sort of like APM for your actual engineering team. But they priced it out of practicality for almost any organization.

Can you say more about flow? I'm curious about practical use cases, could you share some examples?

PS acquired git prime and rebranded it as Flow, and then basically just kinda ignored it tbh. Basically it analyzed git data and gave info like velocity, how much work was new features vs refactors, etc. Very simplified explanation but for places where code-level analysis is used for performance tracking it can be useful. The problem imo is that while that kind of info is certainly interesting, in most cases it's not really that useful or actionable in practice.

Re: Vista Equity writes off PluralSight value, after $3.5B buyout

#80

Post by DowagerDave »

burnte wrote: post #30
ado__dev wrote: post #2

I've been a Pluralsight subscriber for probably over a decade now. Their content is awesome for getting up to speed quickly or just learning about a technology without too much fluff. I do see though how AI is a huge threat to them. Using Claude 3 for coding and being able to ask questions about my specific issues and getting tailored responses every time to my exact issue (vs watching a general video and applying th…

I agree that their products are amazing but having dealt with their sales staff last year and this year, I completely understand why they're underperforming. They're rude, sarcastic, always have a very take-it-or-leave-it attitude, and had a bad attitude when I asked about certain features, like I was wasting their time. I canceled talks for 6 months just to let the memory fade.

I got so pissed when they threatened legal action as a way to "entice" me to upgrade my individual subscription into a team license that I quit it 6 months early. Now at a new company I jumped at the chance to cancel a 90-seat annual contract and we have not had any complaints from the department.
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