151–160 of 451 posts
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Seems undemocratic. Everyday folks can’t buy even though they would want to
It is undemocratic, but it is capitalistic.
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What do you mean over reach? It's the FTC's job to prevent consumer market consolidation. Adobe is already too big and they already abuse that to the detriment of consumers. Buying Figma would make that even worse. A company exists primarily to make things for consumers and the FTC ensures they do that fairly. The IPO, stock price and everything else is secondary.
What do you mean over reach? It's the FTC's job to prevent consumer market consolidation. It is over reach because it seems arbitrary.
Also, the EU and UK also made it clear they were against the merger. In fact, if you look at most reporting, the EU and UK seem to be the main reason they gave up, presumably because they know the US FTC has no teeth, even with a competent chair.
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Seems undemocratic. Everyday folks can’t buy even though they would want to
It is, it is yet another of the constructions that increases inequality and makes rich people richer. Yes, an ipo is volatile, it should be! You are literally pricing a company. Sigh, regardless, Thisnis again one of these ways where free markets are being smashed by monopolistic behavior - you can only be a part of the game if you already have enough.
You can buy VTI which takes about 7% allocation in every IPO, but I heard there is research by some folks at Harvard and practiced by dimensional fund advisors‘ funds that buying IPOs ~two years later is slightly better?
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Seems undemocratic. Everyday folks can’t buy even though they would want to
It’s just a bulk discount: everyday folks simply can’t be relied upon to buy hundreds of millions of dollars the stuff and that’s what the company is selling. Little fish can buy in, but only if the big fish provide liquidity in the first place! In other words: someone needs to be paid to sell it and big buyers need to be incentivized to buy it. Ultimately the IPO price is driven by supply and demand with a limited s…
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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
Figma is a web app. Web apps are fundamentally a hyper-competitive market because literally anyone can just throw something up on the internet if they think there is a need for it. The risk here of Adobe overcharging for it is rather low - someone would build a cheap clone. People keep coming up with theories that companies are about to corner the market then over-charge, but the theories vastly outnumber the cases w…
A clone would need to start from scratch and compete against a huge corporation with virtually unlimited funds.
> It is almost always that the biggest companies in the market are just more competitive (lower prices or higher quality) than all the others.
That is almost always not what is happening. The big players extinguish any would-be competition early by buying them or throwing sticks into their wheels. They can afford to strategically make a loss in a given area to underbid the competition by overcharging in others, or relying on synergies. There are numerous examples where small teams built highly qualitative alternatives to corpo stuff, but had to compete against the network effects and brand names instead.
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Except the majority of the Figma IPO was captured by banks due to it's severe pop. So while everyone made a lot of money, the overwhelming majority went to the underwriters [0]. The founding team at Figma would have gotten a similar amount much sooner if the acquisition was let thru OR if the underwriters didn't screw them over by underpricing at $33. [0] - https://pitchbook.com/news/articles/figma-ipo-pop-spotlight-…
The IPO "pop" is not captured by banks: it's captured by the banks customers that pre-buy at the IPO price. Basically, before an IPO, the underwriters take the company on a "roadshow" in which they pitch the IPO to potential buyers. There's a hierarchy of these: the best are very large buyers that place large orders and trade seldom. Pensions, sovereign wealth funds, etc. Those buyers then make offers ("I'll buy 50MM…
You also sometimes need to tactically trade with worse brokers so they will feel nicer during an IPO.
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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…
Instagram was bought for $1B. Whether they had 13 or 1300 employees, a $1B acquisition isn’t small in an anti-trust sense.
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It is undemocratic, but it is capitalistic.
Even Adam Smith would argue that monopolies are bad - the fact that you are deacriminated upon to buy capital is the direct opposite of capitalism.
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yep. So perhaps don’t block every potential transaction on flimsy pretense? Icing the transaction market seems like a great way to scare off potential competing acquirers in the name of social engineering. I don’t know. All I know is that Lina is out of power, and suddenly we see an upswing in M&A. Coincidence, I’m sure.
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.
The VMware shareholder's value though probably went up from that deal.
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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.