It's a fair point but it's easy to say it after the fact- there was no guarantee of a better outcome.
Lina Khan points to Figma IPO as vindication of M&A scrutiny
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Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#112More companies going public, earlier is better for markets and society. Having companies stay private growing from 0 to 100B value allows VC bros to capture all the growth and then unload onto the public via IPO or selling to a larger BigTech firm.
If you mean specifically the case of VC companies, this is true. I think the opposite is the case when we’re talking about “naturally grown” companies that didn’t take on serial investor money.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#113Earlier quoted context omitted.
And yet, groceries have never been cheaper. So the question becomes which do you want: consumer benefits, or your aesthetic preferences regarding how big a company should be?
Should jobs be a factor as well? I see a lot of job loss in small town Iowa and Nebraska. I don't live there and people there have definitely voted with their wallets. Food plus quality price index in Japan and France look better to me despite the lack of Walmarts. And, I read some things about price collusion of the major grocers during the pandemic that makes me concerned. I will say, thanks for being a human and d…
You can analyze it on that basis, but it's a political question. Is the grocery industry a jobs program?
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#114It's a fair point but it's easy to say it after the fact- there was no guarantee of a better outcome.
She was instrumental in blocking the acquisition by Adobe, obviously her claim at that time was that it would lead to a better outcome.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#115Earlier quoted context omitted.
Her point is that m&a isn’t the best thing for the economy or founders. Unchecked m&a creates cannibal capitalism where one mega zombie firm scoops up all competition.
Yet there are plenty of examples of monopoly or near monopoly businesses getting their butts handed to them by startups. Yahoo, BlackBerry, Kodak, Nokia, Sears. So it’s clearly not “once you have a monopoly it’s game over for competition”. Markets aren’t stagnant, and as they change it provides opportunities for new competitors to do that “new thing” better than the monopolies.
And how many businesses do you estimate have been killed or eliminated because of unchecked m&a? Expanding the data set to include non-tech industries indicates strongly that it's not always the case that a big monopoly will eventually fail. Healthcare for example is filled with instances of bigger companies acquiring smaller ones and killing the competition to their product, a quick Google search will show you that.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#116Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#117Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#118Everyone in this thread who posts some variation of "wow love it how the government gets to decide if you get to sell your startup or how the market should work" should be handcuffed to their chair and forced to answer these 3 questions: 1. is there any role for gov't antitrust in your view of modern capitalism? 2. if there is a role, why is Adobe x Figma not the perfect example for enforcement? 3. if your answer is…
Keep in mind that this is a forum run by a company that is a funnel for new VC companies and most people are in adjacent places in tech,
Principles don’t pay the mortgage.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#119So 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?
IPO valuation is pretty much always set to undervalue so it gets a good pop(1). The market cap after 90 days of trading (generally speaking when insiders lock-up provisions expire and there is no longer a limit on the number of shares that can be sold) is a much better estimate of the actual value of the company. We don't have that yet, but right now the stock is ~3x the valuation that Adobe was going to buy at. Every equity owner is currently booking this as a win. We'll see what the price is when the lock-out provisions end, but right now definitely the shareholders are glad that they didn't merge.
I know that because if the metric you cite was something that the investors and managers cared about, they could have done other things to boost it (see footnote 1). They didn't, ergo they don't consider that metric to be a useful gauge of the company value. It sure looks like you tried to find the worst performing metric to claim that there was a loss, when so far this has been a major win for the shareholders(2).
1: If you don't want this and want to IPO at the highest valuation, you do a direct listing like Spotify did, or a SPAC reverse merger like Trump Media did. But there are reasons that the vast majority of companies choose to do a traditional IPO. For most companies, this is a one-time transaction that will make the managers very very rich, and they want to get the best guidance on navigating it- and are willing to pay handsomely for that guidance, since this is the only time in their lives they will be CEO for a major company that is starting to list. So they follow the IPO/greenshoes/pop route.
2: The most important nuance on that statement is that it took them a year and a half to extract that extra value by doing an IPO, and now they are exposed to market risk. We will have to see what the market conditions are like in another few months when the lock-ups expire.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#120So 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?
Yes? Not everything is about capital owners and their profits. There is a lot of importance in the competition in the market and customers having choice of best products around. Figma competing with adobe is one of the examples. Even from capital point of view everyone is now forced to make their bet - either on adobe or figma, so it’s more efficient capital allocation too.
1. Figma actually lost money because their acquisition price was higher than their shares sold in the IPO.
2. Yes, Figma luckily IPOed in an extremely hot market
Getting a bit lucky doesn't mean this was a success overall. The conclusion has many more years to go before it gets written. Either way, I don't like the over reach by Lina Khan.