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Reports: EA set to be sold to private investors for up to $50B

arstechnica.com

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Re: Reports: EA set to be sold to private investors for up to $50B

#51

Post by shalmanese »

baxtr wrote: post #31
modeless wrote: post #11

Earlier quoted context omitted.

They generally pay a premium to the stock price before the transaction is announced, which means shareholders get more than the market value of their investment, which they can immediately roll into other investments. Usually people don't mind getting paid extra.

Yes but they also lose any potential gains in value after the transaction. Not being able to participate in a private company’s growth is something I find pretty annoying. For myself but also for society.

They are also shielded from any losses. The stock price is meant to reflect the market consensus on the net present value of all time-discounted future cashflows. If you feel the stock will certainly gain in the future, you should purchase the stock now and if enough people believe that, the stock now will reflect the future gain.

Re: Reports: EA set to be sold to private investors for up to $50B

#52

Post by baxtr »

chii wrote: post #47
baxtr wrote: post #31

Earlier quoted context omitted.

Yes but they also lose any potential gains in value after the transaction. Not being able to participate in a private company’s growth is something I find pretty annoying. For myself but also for society.

> lose any potential gains in value after the transaction. the premium paid over the market price takes that into account.

Only to a degree ofc. Otherwise, there would be absolutely no sense in buying up that company.

Re: Reports: EA set to be sold to private investors for up to $50B

#53

Post by derektank »

baxtr wrote: post #35
horsawlarway wrote: post #32

Earlier quoted context omitted.

Yeah... But society doesn't really have this problem. Plenty of ways to invest in private companies. You just need wealth and connections.

> You just need wealth and connections. That’s exactly the problem I’m talking about. Public companies create more equality.

You could just eliminate the regulations on who can and cannot be an accredited investor. It's a bit paternalistic to tell people what they can and cannot spend their money on in the first place tbh

Re: Reports: EA set to be sold to private investors for up to $50B

#56

Post by chii »

baxtr wrote: post #52
chii wrote: post #47

Earlier quoted context omitted.

> lose any potential gains in value after the transaction. the premium paid over the market price takes that into account.

Only to a degree ofc. Otherwise, there would be absolutely no sense in buying up that company.

> no sense in buying up that company.

if the new buyers think the old owners have a lower expectation of future earnings than them, then the buy makes sense.

Re: Reports: EA set to be sold to private investors for up to $50B

#57

Post by gdulli »

baxtr wrote: post #31
modeless wrote: post #11

Earlier quoted context omitted.

They generally pay a premium to the stock price before the transaction is announced, which means shareholders get more than the market value of their investment, which they can immediately roll into other investments. Usually people don't mind getting paid extra.

Yes but they also lose any potential gains in value after the transaction. Not being able to participate in a private company’s growth is something I find pretty annoying. For myself but also for society.

Another immediate consequence is that it's a forced/unplanned taxable event. Which may or may not be an inconvenience to someone's planning.

Re: Reports: EA set to be sold to private investors for up to $50B

#58

Post by hollerith »

pfannkuchen wrote: post #49
hollerith wrote: post #26

Earlier quoted context omitted.

"Immediate 20-30% jump in stock price" is not wrong, but it is clearer to say that for the acquisition to succeed, usually the acquirer must pay a 20-30% premium.

20-30% premium even over the fictional mark-to-market stock price. If all that were to hit the open market at once at any time, the price would plummet. I really question whether acquisition ROI is positive except in rare cases on a first order basis. Eliminating future compensation, securing a propaganda emitter, etc I can see (though not quite sure what the story would be in this case).

>If all that were to hit the open market at once at any time, the price would plummet.

But the price doesn't plummet when an attempt to acquire a company is announced.

The price plummets when the holders of many shares want to sell. An attempted acquisition is the opposite of that situation.

Re: Reports: EA set to be sold to private investors for up to $50B

#59

Post by mortsnort »

baxtr wrote: post #52
chii wrote: post #47

Earlier quoted context omitted.

> lose any potential gains in value after the transaction. the premium paid over the market price takes that into account.

Only to a degree ofc. Otherwise, there would be absolutely no sense in buying up that company.

Often the buying company brings synergies from their own company that unlocks extra value (in theory).

Re: Reports: EA set to be sold to private investors for up to $50B

#60

Post by tempodox »

vorpalhex wrote: post #34
MadVikingGod wrote: post #30

So will this make EA less evil or more? They have shepherded so many great IPs, but also have been on the forefront of sleaze practices. There has to be plenty of money just squeezing those IPs or using the talent in making new things, but I have the feeling that we are going to see more of the same thing with super micro transactions.

Taking an entity private is expensive and typically only done if you intend to change the direction the entity is heading in a way that shareholders won't accept. Accelerating EAs enshittification seems like it wouldn't require taking them private. Rather it seems like the investors intend for a change in direction. What that is remains to be seen, but I read this as hopeful, not harmful.

> Accelerating EAs enshittification

Is that even possible? Granted, this question is purely hypothetical for me, since I’m not buying anything from them as it is, but still…

Maybe a miracle occurs and they actually change for the better? I’ll believe it when I see it.

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