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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

#241

Post by api »

holmesworcester wrote: post #227
benreesman wrote: post #226

Earlier quoted context omitted.

The lengths people will go to to avoid the facts on this are fucking remarkable. I'll let Opus explain: "The Bottom Line A 73% annualized return would: Easily rank in the top 10-20 best-documented investment returns of all time if sustained for multiple years Significantly outperform virtually all professional fund managers and legendary investors Be 7x higher than the long-term stock market average Turn $10,000 into…

Then why did shareholders choose to sell? In choosing to sell they decided the risk wasn't worth the reward. If you were in their position, would you have sold or held?

Maybe they thought an IPO wasn’t going to happen because the market would be in bad shape or there would be too much regulation there.

Maybe they were seeing the AI boom on the horizon and wanted the capital out now to deploy there. They wanted to chase AI not hodl some “old” pre-AI thing. A lot of people think AI is going to render the entire process of which Figma has become a key part obsolete. (I don’t.)

Those are two things I can think of to explain this behavior.

Also some people like to get out when they’re ahead. “The world is full of rich people who sold too soon, not rich people who sold too late.” This makes sense if you are generally pessimistic, which many are for various reasons.

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

#242

Post by api »

benreesman wrote: post #212
dabedee wrote: post #177

I think the Figma IPO proves Khan was right. $60B market cap today vs the $20B Adobe offered in 2023. There was some criticism about regulatory overreach when the deal got blocked. Now Figma employees are rich, the design tools market stays competitive, and we have another major independent tech company instead of just another Adobe product line. This is exactly why we need regulators willing to tell Big Tech "no" so…

It absolutely proves that she was right. If you care about market cap? She was right. If you care about employee comp? She was right. If you care about consumer choice, she was right. Number of listings, new potential acquirers for your startup, more diverse office geography, right right right right. The idea that there's a significant lobby on fucking Hacker News unhappy that a startup IPO'd for a zillion bucks and…

There’s a lot of people I’ve talked to who didn’t like Lina Khan not because of the Figma thing but because they thought she was having a chilling effect on acquisitions broadly.

The vast majority of startups will never IPO. Acquisition is the only viable exit. That’s because the bar for IPO has risen so high that only massive already incumbent unicorns can reach it. IPO isn’t a way to raise capital to compete. It’s a victory lap if you’ve won already.

Don’t know if this is actually true, that she was having this chilling effect. I am relaying a sentiment I’ve encountered.

Of course the other reason is tech-right echo chamber brain rot. People need to get off Xhitter. (Not a fan of doomer left anti tech brain rot either. There’s more than one kind of brain rot around.)

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

#243

Post by api »

holmesworcester wrote: post #232
benreesman wrote: post #212

Earlier quoted context omitted.

It absolutely proves that she was right. If you care about market cap? She was right. If you care about employee comp? She was right. If you care about consumer choice, she was right. Number of listings, new potential acquirers for your startup, more diverse office geography, right right right right. The idea that there's a significant lobby on fucking Hacker News unhappy that a startup IPO'd for a zillion bucks and…

One way to settle the question of whether Khan is right would be for the government to simply make competing offers in these situations, buy the companies, and shepherd them to IPO, or a buyer with fewer antitrust issues if that's not possible. If the government is net ahead after a decade or so, then we'd know. This approach to antitrust wouldn't work in cases like the Apple case, where the power is worth it to the…

Terrible terrible idea with incredible potential for corruption and theft of public funds.

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

#244

Post by benreesman »

api wrote: post #242
benreesman wrote: post #212

Earlier quoted context omitted.

It absolutely proves that she was right. If you care about market cap? She was right. If you care about employee comp? She was right. If you care about consumer choice, she was right. Number of listings, new potential acquirers for your startup, more diverse office geography, right right right right. The idea that there's a significant lobby on fucking Hacker News unhappy that a startup IPO'd for a zillion bucks and…

There’s a lot of people I’ve talked to who didn’t like Lina Khan not because of the Figma thing but because they thought she was having a chilling effect on acquisitions broadly. The vast majority of startups will never IPO. Acquisition is the only viable exit. That’s because the bar for IPO has risen so high that only massive already incumbent unicorns can reach it. IPO isn’t a way to raise capital to compete. It’s…

Yeah, I have heard that sentiment too. I've never heard so much as a second-hand anecdote that someone was on the track of an acquisition but got the vibe their 50 million dollar acquihire plus was going to just be too much trouble under an activist chairwoman though.

It seems to me that the same weaponization of binary tribal thinking in red/blue social stuff has a corollary in "entrepeneur / commie" oversimplification with about as much nuance.

Smart people get emotionally manipulated on every other kind of politics at the behest of the new oligarchs, why not this one?

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

#245

Post by benreesman »

rexpop wrote: post #240
ferfumarma wrote: post #223

Earlier quoted context omitted.

I cannot understanding your argument at all.

If you eliminate formal regulators (rules, laws, authoritative bodies), you haven't eliminated regulation or governance. Instead, informal forms of power take over—those who are most forceful, persuasive, or socially connected regulate what happens. This is the "tyranny of structurelessness": when no open, accountable structures exist, structure remains—it just becomes invisible, unaccountable, and often dominated by…

I find people tend to get it when you raise cases of market activity outside the law: everyone knows the mob buys and sells things but there are still rules.

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

#246

Post by stephen_cagle »

I wonder if a simpler solution to all this regulartion would be something like imposing a tax (fee?) when larger companies acquire smaller companies? So something like, "For every order of magnitude difference between the acquirer and the aquiree, there will be a 100% tax on the acquisition price paid to the US Federal government."

So this would basically encourage companies to either have their own IPO (no fee at all) or be acquired (merged really) by a company of equivalent size. If you are acquired by a much larger company, that company will have to pay a (logarithmicaly) large fee relative to the acquisition price. If they really want it, no problem, but it will be "cheaper" for a more correctly sized company to acquire them.

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

#247

Post by wredcoll »

benreesman wrote: post #206
bko wrote: post #186

Earlier quoted context omitted.

What does this mean? If there is no regulator, someone else will use force to prevent voluntary mutually beneficial deals from taking place?

It means that markets organize somehow. Even black markets in prison have rules (and for all I know, sensible ones under the circumstances). The drug trade has rules and norms. Cartels form and collude, the JP Morgans or Goulds of the world see excessive competition next to their neat steel or railroad trusts and decide to organize it. And sometimes this can even be an improvement (those old telephone poles with like…

My definition of this (which apparently I'm now trying to popularize) is "power can never be destroyed, only moved".

If we destroy an entity that has power, the power goes someplace else and in the case of (democratic) government entities, it rarely ends up someplace better for us regular folks.

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

#248

Post by lvl155 »

Apocryphon wrote: post #237
lvl155 wrote: post #229

Earlier quoted context omitted.

I am not a big Sam Altman fan but this is not a good comp. Sam is an insider in SV and one of the biggest at that. He knows everyone. You are basically saying Sam didn’t know anything about AI yet he is one of OpenAI’s founding members. Unlike Elon, at least Sam knows a thing or two about actual software dev.

Okay, what experience did Musk have in aerospace when he founded SpaceX?

He had money. Why do you keep conflating people doing business using their own money with appointing government officials with zero experience?

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

#249

Post by amelius »

dabedee wrote: post #177

I think the Figma IPO proves Khan was right. $60B market cap today vs the $20B Adobe offered in 2023. There was some criticism about regulatory overreach when the deal got blocked. Now Figma employees are rich, the design tools market stays competitive, and we have another major independent tech company instead of just another Adobe product line. This is exactly why we need regulators willing to tell Big Tech "no" so…

> This is exactly why we need regulators willing to tell Big Tech "no" sometimes.

At some point, "Big Tech" is really "Big Finance" in disguise.

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

#250

Post by respondo2134 »

benreesman wrote: post #212
dabedee wrote: post #177

I think the Figma IPO proves Khan was right. $60B market cap today vs the $20B Adobe offered in 2023. There was some criticism about regulatory overreach when the deal got blocked. Now Figma employees are rich, the design tools market stays competitive, and we have another major independent tech company instead of just another Adobe product line. This is exactly why we need regulators willing to tell Big Tech "no" so…

It absolutely proves that she was right. If you care about market cap? She was right. If you care about employee comp? She was right. If you care about consumer choice, she was right. Number of listings, new potential acquirers for your startup, more diverse office geography, right right right right. The idea that there's a significant lobby on fucking Hacker News unhappy that a startup IPO'd for a zillion bucks and…

IPOs are a really tough path, and can significantly alter the business. I'd hesitate to hold up the big one for this year as vindication for her entire approach. The vast majority of growth tech companies are not going to go public, but need to release value for investors and employees, and PE or acquisition is the only path open to them. If you've ever had experience with PE you might not want to deal with that, and getting bought is all that's left if you owe people a big return soon.
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