101–110 of 451 posts
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I disagree with the concept of “monopoly” or rent seeking in a free market. And the only way a market becomes non-free is with government regulation
The world has never, ever seen a free market, and probably never will. The idea that completely unencumbered markets would actually give good outcomes for society is a complete fantasy.
My experience with mergers and acquisitions is that it's akin to keeping a warm body on life support. When I worked at a company that did a lot of M&A I was sitting around like, "Why couldn't you have just built that?" When I worked at a company that was recently acquired and went through the merger process I was like, "wow I see why you bozos would've never built this yourselves." That isn't to say there aren't comp…
The secondary market drives the primary market.
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I disagree. A lot of smaller acquisitions went away during the Khan reign, and from what I was hearing it wasn’t coincidental. Basically the random and aggressive nature of it was having a chilling effect on all M&A. Why would you go thorough the hassle of a small acquisition (as a buyer) if you knew there was a even a 10% chance that the FTC was going to take an interest?
Scrutiny scaled with the size of the buyer. When a top-five tech company is the buyer, it doesn’t really matter how small the purchased company is. Many of the most concerning acquisitions were small… Instagram had 13 employees when Facebook bought it. When a huge company can easily acquire basically any small promising competitor, that is exactly what Khan (and many others of both parties) consider a problem. Chilli…
Maybe, but it doesn't take a lot of scrutiny to scare the crap out of you if you're a major player in some niche industry with a few hundred million in ARR. Which is most public companies.
That's the perverse thing about this stuff: the biggest players are probably the least sensitive to the regulatory burden.
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But the company only sold the shares at $19.3B.
Right, which gave them 19B (ish) to play with and they are an independent competitor to Adobe. Mergers trigger layoffs
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Problem is, by the time she got into power, everyone had consolidated so icing the transaction market was pretty much only outcome. Lina Khan was entering a market that was deeply flawed thanks to decades of bad policy.
> Problem is, by the time she got into power, everyone had consolidated so icing the transaction market was pretty much only outcome. That's the talking point, but it doesn't survive even 30 seconds of thought. Yes, the biggest tech companies are very big -- debatably too big! -- but there are easily hundreds of smaller cap companies that you probably haven't heard of who are big enough to acquire startups. If anythi…
I think startups exiting via M&A is part of the problem. It creates perverse incentives which is basically fuck profits, squash all competition while lighting money on fire and THEN when you are so embedded, sell the company so original investors get their money back and new owners screw over everyone knowing there tunneling out of your really thick walls is going to be extremely difficult.
In a model where company had to turn a profit and investors would slowly make their money back, it would probably be net win.
So blocking a sale at a $20B valuation so the company can IPO at a $19.3B valuation 3 years later (a loss of $700M in value over 3 years) is a success?
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> Problem is, by the time she got into power, everyone had consolidated so icing the transaction market was pretty much only outcome. That's the talking point, but it doesn't survive even 30 seconds of thought. Yes, the biggest tech companies are very big -- debatably too big! -- but there are easily hundreds of smaller cap companies that you probably haven't heard of who are big enough to acquire startups. If anythi…
What is your argument? That smaller roll ups could not happen and that was bad? Alot of smaller M&A in tech space was bad, it just was not Figma buying Adobe bad. I think startups exiting via M&A is part of the problem. It creates perverse incentives which is basically fuck profits, squash all competition while lighting money on fire and THEN when you are so embedded, sell the company so original investors get their…
Yeah, you're gonna have to defend that assertion.
> I think startups exiting via M&A is part of the problem. It creates perverse incentives which is basically fuck profits, squash all competition while lighting money on fire and THEN when you are so embedded, screw over everyone knowing there tunneling out of your really thick walls is going to be extremely difficult.
I hate to burst your bubble, but the chances of a small startup getting acquired while "lighting money on fire" is basically zero. You have a particularly narrow-focused lens on startups that is driven by a few high profile stories. When you're on that sort of YOLO rocket ship, you're not looking for acquisition -- if it happens, something went wrong.
So yes, part of my argument is that smaller roll ups could not happen, and that market looks nothing like what you're describing.
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But how is the IPO a sign of success in that case?
because it means they stayed independent and didnt get absorbed by a major megacorp that is already notorious for trying to corner the market of an entire industry and then over-charging
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But how is the IPO a sign of success in that case?
because it means they stayed independent and didnt get absorbed by a major megacorp that is already notorious for trying to corner the market of an entire industry and then over-charging
People keep coming up with theories that companies are about to corner the market then over-charge, but the theories vastly outnumber the cases where it ever happens in practice. It is almost always that the biggest companies in the market are just more competitive (lower prices or higher quality) than all the others.