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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

#121

Post by Spooky23 »

elefanten wrote: post #59
linotype wrote: post #30

Earlier quoted context omitted.

What errors?

A lot beyond the scope of the time I have to comment here. Read it with an open mind, knowledge of tech business, knowledge of how things unfolded since it was published and see for yourself. But some short hand: -Assumes vertical integration is necessarily abusive -Assumes lowering price is necessarily a setup for anti-competitive practices. This one’s particularly ironic because lowering prices is definitely a firs…

We’ve seen this TV show before, but nobody paid attention. The magnificent 7 are essentially the ITT/LTV/Litton of the 1960s reborn. GE is the other one of more recent memory.

Massive diversified entities get bureaucratic, unwieldy and ineffective over time.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#122

Post by adastra22 »

aurareturn wrote: post #120
boroboro4 wrote: post #84

Earlier quoted context omitted.

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.

They lost money (sort-of) because the market cap was $700M less at IPO. The amount of shares sold in IPO is irrelevant.

I said sort-of because the economics of this is more complicated. Investors lose their preferences when they sell in an IPO, so this is probably better for common stock holders.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#123

Post by chii »

steveBK123 wrote: post #58

More 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.

> then unload onto the public via IPO

this implies they're unloading at a valuation that is higher than it is worth. If so, why do "the public" make the purchase?

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#124

Post by radiofreeeuropa »

elefanten wrote: post #59
linotype wrote: post #30

Earlier quoted context omitted.

What errors?

A lot beyond the scope of the time I have to comment here. Read it with an open mind, knowledge of tech business, knowledge of how things unfolded since it was published and see for yourself. But some short hand: -Assumes vertical integration is necessarily abusive -Assumes lowering price is necessarily a setup for anti-competitive practices. This one’s particularly ironic because lowering prices is definitely a firs…

> It is a lazy dodge around the traditional responsibility of regulators to identify and regulate actual anti-competitive behavior when it actually happens

Traditional since the ‘70s, when Chicago school jackasses got their way and all but destroyed antitrust enforcement, in practice.

A shift back would be great. Let’s get a little more traditional.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#126

Post by root_axis »

timr wrote: post #104
snowwrestler wrote: post #99

Earlier quoted context omitted.

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…

> Scrutiny scaled with the size of the buyer. 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.

> 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

This "scare" characterization isn't how anybody thinks in reality. Everything is a cost benefit analysis, the risk that you'll come under FTC scrutiny is going to be a factor weighed against the potential gains of the acquisition. Companies understand their own place in the market relative to their size and dominance, the overwhelming majority of companies know they basically have nothing to fear from the FTC ever.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#127

Post by braiamp »

msgodel wrote: post #102
oooyay wrote: post #36

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…

>nobody actually benefits from this The secondary market drives the primary market.

If you mean the ones transacting in derivatives, no, they don't. The US market isn't India where the size of the secondary market was bigger than the primary market. If you mean that financial markets drive real markets, that's also wrong. While yes, certain products need a infusion of cash to get to market, that's not the same as having a company acquire the possibility of a new product and just sit on it.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#128

Post by unmole »

braiamp wrote: post #127
msgodel wrote: post #102

Earlier quoted context omitted.

>nobody actually benefits from this The secondary market drives the primary market.

If you mean the ones transacting in derivatives, no, they don't. The US market isn't India where the size of the secondary market was bigger than the primary market. If you mean that financial markets drive real markets, that's also wrong. While yes, certain products need a infusion of cash to get to market, that's not the same as having a company acquire the possibility of a new product and just sit on it.

You could just look up what primary and secondary markets meant without speculating and chiming in with irrelevant takes.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#129

Post by samrus »

DenverR wrote: post #88
kelnos wrote: post #77

Earlier quoted context omitted.

I do love it. Companies don't exist solely to enrich their founders, they exist to provide a benefit to society. There needs to be a balance, of course, but if allowing a sale does not benefit society, then we should not allow it. > your startup You're under the misconception that companies "belong" to individuals. Companies are legal frameworks that society has decided upon. We could legally decide that M&A just isn…

Congratulations you’ve just described central planning. So “society” should be able to veto a sale, but when payroll is due the owners are on the hook?

Reductionist. Your phrasing it like the onky options are full central planning and libertarianism. Theyre both wrong. You need the free market to do what it is capable of, and regulate it when its isnt. The free market was going to let monopolies form. We have all already agreed thats bad. Khan's policies just updated that to the tech sphere

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#130

Post by littlestymaar »

austhrow743 wrote: post #109
alchemyzach wrote: post #95

Earlier quoted context omitted.

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

That’s unrelated to the IPO.

How? A VC-backed company must have an exit path for its investors at some point, and this exit is either:

- sell the company to a bigger player, reinforcing their dominant position (often close to monopolistic in tech).

- go to IPO, keeping the company independence and fighting power concentration.

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