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Figma and Adobe abandon proposed merger

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Re: Figma and Adobe abandon proposed merger

#141

Post by michaelcampbell »

dkyc wrote: post #13
madeofpalk wrote: post #6

Excellent news. I think there should be more products, more companies, and more competition. Adobe just buying up it's competition will only ever directly hurt consumers. See also, "Adobe says the FTC is looking into its subscription cancellation practices." https://www.theverge.com/2023/12/15/24003532/adobe-says-the-...

Except outlawing acquisitions by larger tech companies will absolutely reduce funding and incentives to start companies, and result in less products, less companies, and less competition.

Just like when there WERE no megacorps to buy smaller companies and we were left with none at all.

Re: Figma and Adobe abandon proposed merger

#142

Post by macintux »

londons_explore wrote: post #84
hallway_monitor wrote: post #7

It looks like regulators are actually doing their job. I would love to see more of this, along with breaking up companies that have gotten too big for their britches.

The problem is nearly all company mergers, both big and small, are detrimental to competition... Even my local corner store merging with a corner store in the next town over is bad for suppliers (combined negotiations when buying stock), and bad for consumers (prices set the same between the two towns). I wonder what a world where company mergers were banned would look like?

I imagine you could look at U.S. banking before and after 1980 to get some sense of what an industry looks like before and after mergers became legal.

https://en.wikipedia.org/wiki/Depository_Institutions_Deregu...

Re: Figma and Adobe abandon proposed merger

#143

Post by benterix »

dkyc wrote: post #13
madeofpalk wrote: post #6

Excellent news. I think there should be more products, more companies, and more competition. Adobe just buying up it's competition will only ever directly hurt consumers. See also, "Adobe says the FTC is looking into its subscription cancellation practices." https://www.theverge.com/2023/12/15/24003532/adobe-says-the-...

Except outlawing acquisitions by larger tech companies will absolutely reduce funding and incentives to start companies, and result in less products, less companies, and less competition.

Yeah, I get it, some founders start their startup motivated by a potential MA. And this is great for them.

However, as a customer, I absolutely hate this. Instead of finding a way to actually make the product/service self-sustainable, they just increase the number of (usually) free users. But once they sell, normally the new owner either shuts the service down or turns it into crap.

Re: Figma and Adobe abandon proposed merger

#145

Post by DaiPlusPlus »

tonyedgecombe wrote: post #86
dkyc wrote: post #50

Earlier quoted context omitted.

The reality is that for extremely high-growth companies such as Figma, only companies with an extremely strong existing business and strategic fit can afford to acquire them. Corel, for example, was valued at $1bn in their 2019 acquisition. There's absolutely no way they could acquire Figma. At the same time, VCs are betting on Figma-like outsized exits for their model work. I get people are dying to stick it to the…

They couldn't acquire Figma for $20 billion but that doesn't mean Figma isn't acquirable. It just means the founders and investors get a bit less. > and strengthening the situation for the cash-rich behemoths like Microsoft, Google, etc. It certainly isn't good for Adobe as they will have a strong competitor in Figma to deal with.

> It certainly isn't good for Adobe

It is good for Adobe: they'll be forced to make their products better.

...I hope!

Re: Figma and Adobe abandon proposed merger

#146

Post by corry »

max_ wrote: post #112

This really makes me sad as an aspiring entrepreneur. What would be the use of starting a business if the government can arbitrarily block it from being acquired? I understand this happening in Europe but not America. I think America is going to lag behind in tech entrepreneurship just like Europe and I wonder what the next potential tech entrepreneurship hub will be.

Ummm. This seems like a huge overreaction. Do you think the founder of Figma -- which is still worth $B's, making him obscenely wealthy 'on paper' (but 'on paper' in a way that most wealth is counted) -- plus, he likely sold enough via secondaries during the later rounds to be set for life -- is bemoaning his career path?

Furthermore, there's something like 20k M&A deals / yr completed in North America alone, the majority that are still life-changing wealth creation events for the founders.

So don't despair - 1 problematic anti-competitive M&A deal blocked by the government does not signal the end of entrepreneurship in the US.

Re: Figma and Adobe abandon proposed merger

#147

Post by Ekaros »

reustle wrote: post #100
eigenvalue wrote: post #75

Earlier quoted context omitted.

Nope, from Adobe’s 8K filed today with the SEC: “On December 17, 2023, the Company and Figma mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement effective as of such date (the “Termination Agreement”). The mutual termination of the Merger Agreement was approved by the Company’s and Figma’s respective Boards of Directors. In accordance with the terms of the Termination Agr…

> the Company will make a cash payment to Figma in the previously agreed amount of one billion dollars ($1,000,000,000) (the “Termination Fee”) within three business days following the date thereof Three business days to wire $1b, the week before Christmas. That has to be a fun phone call with the bank.

I hope they have big bank... Then again it would also be funny if bank crashed because someone was forced to transfer 1 billion.

Re: Figma and Adobe abandon proposed merger

#148

Post by bilekas »

madeofpalk wrote: post #6

Excellent news. I think there should be more products, more companies, and more competition. Adobe just buying up it's competition will only ever directly hurt consumers. See also, "Adobe says the FTC is looking into its subscription cancellation practices." https://www.theverge.com/2023/12/15/24003532/adobe-says-the-...

I agree to be honest, I do find it refreshing too that they're both Willing to part ways instead of trying to manipulate the system. I don't think this could just customers but even the companies themselves I don't see a loss.

Re: Figma and Adobe abandon proposed merger

#149

Post by raiyu »

Anyone else think this has nothing to do with the regulatory agencies but instead the market has dramatically shifted in the past 15 months in terms of valuations and this is a nice cover to cancel the deal?

Figma still gets $1B "investment" without giving up any equity or control and Adobe gets to walk away from a massive $20B fee.

Adobe makes $17B a year in revenue, they would need some pretty strong growth out of Figma to justify the price tag especially after valuations came down.

But it is nice to "blame" the regulatory agencies for the breakup so that both companies save face.

Also just seems unlikely that it was regulatory. Sure Adobe has the market cornered but it doesn't seem like this is where the agencies would suddenly choose to care so much. And if it was regulatory, then shouldn't those agencies come out and say "We blocked this, no go."

Re: Figma and Adobe abandon proposed merger

#150

Post by delusional »

dkyc wrote: post #50
DaiPlusPlus wrote: post #30

Earlier quoted context omitted.

I'm fine with some other company buying-up Figma, just not Adobe. Microsoft could buy them (and hopefully not repeat what happened to Expression Blend) - or maybe Alludo could resurrect the Corel brand and launch Figma under that title?

The reality is that for extremely high-growth companies such as Figma, only companies with an extremely strong existing business and strategic fit can afford to acquire them. Corel, for example, was valued at $1bn in their 2019 acquisition. There's absolutely no way they could acquire Figma. At the same time, VCs are betting on Figma-like outsized exits for their model work. I get people are dying to stick it to the…

I think the "disruption" narrative has played itself out by now. Nothing has been disrupted. Society still largely functions the same way as it did 20 years ago, and the same firms are mostly still running the same businesses.

We were promised a radical new world, what we got was a couple of apps for fast food delivery from McDonald's.

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