Live data from Hacker News

Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

investors.squarespace.com

411–414 of 414 posts

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#411

Earlier quoted context omitted.

That’s logically equivalent to saying average black people get a bad reputation because of the few who are criminals. It may be true but there’s nothing they can do about it and the fault really lies with the person who lumps them all together. PE is a giant thing. There is a lot of it. The ones who don’t run companies out of business have no control over the ones who do. You’re using “they” to refer to thousands of…

You think it's valuable to call people ignorant and to compare negative bias against PE funds (of all things!) to racism? I think the comments section would be better without that. Maybe I should keep that to myself, I don't know. You can certainly keep spouting them off, but I'm going to point out how absurd those types of comments are. > You’re using “they” to refer to thousands of people as if they’re a monolith.…

It's valuable to let people know that they may not know as much as they think they do. The tech industry has always suffered heavily from thinking they are smart and everyone else isn't. None of your comments had any more value than that. Which is fine, they don't have to, it's a comment section.

It's a strong indicator of a second-class mind and surface level thinking when they say "you compared X and Y!?!?". Comparisons don't mean anything. "Abraham Lincoln and Hitler were both men" is logically equivalent to what I said, and just as true. I didn't equate the societal effects of the two, I was merely pointing out that people who don't understand groups tend to lump them all together and suffer from observational bias. Human irrationality repeats itself in clear, obvious ways. Sometimes it leads to something terrible (centuries of opression), sometimes it leads to something innocuous (people saying something stupid in a comment thread) but it's the exact same mechanism. Think deeper before saying things that dumb, you're hard to take seriously.

People absolutely do not understand the impacts financiers have had on themselves. They do not understand economics, at all. This is a country (and, in most cases, it's the same everywhere, just swap the title) where most people think the President is a major factor in things like inflation, gas prices, etc. They have no more idea why the economic things they observe happen than they do why they universe exists, and so in the exact same way they jump to the conclusion they understand. Skydaddy made us, rich guys ruined everything for their gain. (There you go, I just compared poor economics knowledge to religion, have fun.)

If a lot of people think something, it is not because it is correct. (Sometimes it is correct by happenstance.) It is because they are exposed to a lot of propaganda to that effect and they don't know enough to have a more nuanced explanation.

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#412

Earlier quoted context omitted.

in tech, the LBO model is about selling at a higher revenue multiple than you bought it for, cashflows be damned. traditional LBOs are not done on revenue multiples

ALL LBO models are about selling the asset for a higher multiple than it was bought for. Not just tech. Also, CFs are the most important thing for an LBO. The point of this investment model is for an asset to pay for itself, so if it has no cash flows how can it possibly do that. Also cash flows =/= profit here. You can be cash flow positive and not be profitable. And you are right about LBOs not being done on rev mu…

I misspoke. Generally speaking, when modeling an LBO you assume entry = exit multiple to be conservative. What I meant to say is that in Tech, if you sell at the same, call it, 10x multiple on Revenue but your annual revenue grew some X% over the period, you can still get to a very compelling IRR even if the actual CF profile of the business hasn't improved at all. Obviously if you sell at a higher multiple that is doubly true.

The point is Tech companies don't strictly need profitability to be considered good LBO candidates, because everything is done at the top line level for the "sexier" very high growth companies.

The asset still "pays for itself" on exit, just not so much during the investment period. In other words, the value to equity holders is not from debt paydown with the assets' cash flows, but with the exit proceeds.

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#413
post #77

The gold rush is over - private equity is going to squeeze every little drop from the companies that have been built and we will move on to Web 3.0 - which will be just like web 1.0 - self-hosting, link directories, newsletters, and guestbooks.

As much as I'd like to see a web 1.0 revival, this won't happen. The traffic is controlled by Google and social networks. Most people don't have the skills needed to run their own website. A lot of valuable content is created by people without these sorts of skills.

I have been dreaming of creating a mixed hardware/cloud service that would make this possible again in today's internet. Basically, you can open an account and get your own domain and nextcloud + mastodon + wordpress instance. You pay based on how much storage you use. If you want, you can get your entire cloud shipped to your home, attach it to a router there, and then you only pay for my service to be the gateway to the server you have at home. All the data is at home, you have full control.

Of course, the defaults would have to be basically zero-management. But people would be able to choose how much control over their own data they want versus how convenient they want it to be. Right now, it's pretty much all or nothing.

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#414

Earlier quoted context omitted.

The control (assuming we are talking about LBO specifically) is that they have to borrow the money from someone, and those someones are giant banks who also like money and aren’t stupid.

not stupid but not infallible either, 2008 should have taught us that. Even money managers themselves are gambling at the end of the day. They know they will be saved on the off chance they lose (and likely take a part of the economy with them for a while)

Sure, everyone loses some of the time. LBOs totally have borrowed a bunch of money, sold something for parts, cashed out, and left the banks or the public markets or a future buyer or whoever else holding the bag. It has happened.

It is not, however, the business model, as many here seem to think, because the people on the other end aren’t THAT stupid. There isn’t that much dumb money.

The business model is buy a company that’s in serious need of improvement, fix it, then sell it/take it public. That’s why they prefer companies with high revenue and losses.

Or sometimes, if they think an industry is just poised for strong growth, they just buy and hold. I suspect that’s what’s going on with all the veterinary office purchases we discussed recently.

I really don’t know where Squarespace falls. They’re allegedly keeping management in place which would make me guess they just think it’s poised for strong growth but I really just don’t know.

Post reply on HN