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Figma and Adobe abandon proposed merger

figma.com

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Re: Figma and Adobe abandon proposed merger

#531

Post by eklitzke »

andsoitis wrote: post #156

Why did Figma want to sell itself to Adobe in the first place? Even though their revenue is only about $400MM, As far as I know, they make a very healthy profit (operating margin of ~90%), and they’ve also been expanding through organic and acquisition means (e.g. they bought Diagram). Is it because they see the ability to grow the company’s products even more given the Adobe footprint?

What makes you think they have an operating margin of 90%? The blog post says in the last 15 months alone they've hired 500 additional employees ("figmates"), there's no way their margin is anywhere close to what you cite.

Re: Figma and Adobe abandon proposed merger

#532

Post by chiefalchemist »

ceejayoz wrote: post #320
chiefalchemist wrote: post #314

Earlier quoted context omitted.

[flagged]

The definition isn't hard to find. https://en.wikipedia.org/wiki/Entrepreneurship https://www.google.com/search?q=define+entrepreneur You're confused.

"Entrepreneurship is the creation or extraction of economic value"

Exactly!

But sure, I'll entertain you...

Person 1 is a so called solopreneur. Works hard. Pays bills. But eventually burns out and because no one want her/his "shares", she/he closes shop. "Damn I wish they told me about exit and the value there of...," she/he thinks. A hobby that produces revenue is not the same as producing value.

Person 2 is also solo. Does the same (i.e., works hard, etc). But she/he is constantly concerned about the shareholders. Sure, it just so happens those shareholders are her/him. Nonetheless, there are - in the mind of P2 - shareholders. Eventually, she/he sells the company to some other entity for a respectable amount of money (read: value purely defined).

Person 2 !== Person 1. No way. No how.

Again, I ask, what defines value better than, "We'll pay you for your company."? (Hint: Nuttin' does.)

Friend, the confusion is all yours. You can contort it all you want, but The Truth is:

"We want your company" === value.

p.s. A Google search? That's funny. SERPs? Talk about a lesson in lack of value.

Re: Figma and Adobe abandon proposed merger

#533

Post by pixelbath »

codeptualize wrote: post #126

That is wild. It's a good thing as it means Adobe won't ruin Figma like they did with so many great software products before, but just imagine founders, investors and employees, thinking they had a really good exit.. That must hurt, I hope they can stay motivated. If Adobe can't buy them, what other exit options do they have? Go public?

Figma's press release doesn't mention it, but they've now got an extra $1bn from the merger termination fee to bank, so presumably they could reinvest that into the company and stakeholders.

Re: Figma and Adobe abandon proposed merger

#534

Post by lhnz »

Counterintuitively this will lead to more monopolies since with less likelihood of "exiting" startups via mergers and acquisitions there'll be reduced interest in venture capital and therefore fewer startups capitalised to the extent that they can compete against large monopolies.

Re: Figma and Adobe abandon proposed merger

#535

Post by briffle »

xvector wrote: post #512
BobaFloutist wrote: post #494

Earlier quoted context omitted.

you can expect a serious chilling effect on M&A. Promise?

Not a good thing when it's taken to absurd lengths. See Lina Khan's attempt to block the Within Unlimited acquisition. The problem with the current administration is that there's no good-faith path forwards to get anything done. If you have worked with the FTC recently you'd understand what a hostile clusterfuck it is.

you should really link to something about it that your specifying. Cause it really looks simiar to blocking Microsoft from buying Activision.. A company that makes the hardware trying to buy up all the independant software vendors and have them only make software for their hardware is getting really, really old. I think the only people that would complain are the ones who would directly benefit.

Re: Figma and Adobe abandon proposed merger

#537

Post by consumer451 »

ajmurmann wrote: post #487
Bjorkbat wrote: post #473

Earlier quoted context omitted.

I would argue that the regulators made their point pretty clear early on when the DOJ opened a lawsuit against Adobe. The people most responsible for keeping this in limbo were Adobe’s lawyers.

The Broadcom & VMware merger took similarly long and was approved. The duration is completely unacceptable and poison to business. I'm general against mergers and think it's better for consumers and the market if competitors fight to the (metaphorical) death instead, but if we do something, let's do it smoothly and right. That said, for mergers like that a ton of countries are involved which makes things even more co…

Or, maybe we could make attempts to regulate our market economy in order to prevent monopolies, and thereby encouraging competition. (aka, disruption)

I didn't truly process the damage that monopolies can do until I heard this podcast with Sean Carroll and Cory Doctorow.

There is a full transcript at this link if you prefer to read the conversation.

https://www.preposterousuniverse.com/podcast/2019/10/21/69-c...

Re: Figma and Adobe abandon proposed merger

#538

Post by mrkurt »

zlwaterfield wrote: post #163
nolongerthere wrote: post #12

Earlier quoted context omitted.

Which I think is overall good for the consumer, many of the companies are only merging to lessen competition, not provide any extra value to us.

There’s a bigger picture than just the consumer. If there is not a chance to exit then founders won’t be incentivized to create these companies and employees won’t be incentivized to join or stay at these companies. If M&A markets are limited then the only option is IPO which goes through major cycles and probably can’t support the number of companies needed. Plus many companies can’t get big enough to IPO.

Is this true? I assume there must be founders who won't start companies if they can't get acquired, but I'm not one of them. And I think my closest friends aren't either.

Re: Figma and Adobe abandon proposed merger

#539

Post by microtherion »

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.

Bank is going to have to dip deep into their swear jar to come up with the money.

Re: Figma and Adobe abandon proposed merger

#540

Post by chiefalchemist »

ceejayoz wrote: post #332
chiefalchemist wrote: post #315

Earlier quoted context omitted.

One very simply question: What defines value better than an exit? Or the offer to exit? (Hint: Nothing.) You might not like the definition, but that doesn't mean it's wrong.

Exit valuation doesn't come from God. It comes from metrics like growth, profit, etc., all of which are readily available without actually exiting . Even if we accept your assertion that it's the best way to value something, that doesn't mean it's the only way to value something.

Nah. Not at all. Those are all proxies.

It comes from The Market. It comes from some other entity saying, "This is worth X to us, and we're willing to pay that. Here's an offer."

THAT is value. I've already said this, but I'll say it again:

Revenue !== value.

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