Figma and Adobe abandon proposed merger • Hacker News Board

Re: Figma and Adobe abandon proposed merger

#561

Post by hn_throwaway_99 » Mon, Dec 18, 2023, 5:32 PM UTC

camhart wrote: post #548

hn_throwaway_99 wrote: post #492

Earlier quoted context omitted.

> That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. Your understanding here is fundamentally wrong. Regulators in the US said very early on they were against this merger and were going to fight it. So most of what goes on in the meantime is Adobe and Figma (a) seeing if they can give…

It seems wrong/illegal that they can just "decide they're against the merger" and sink it by dragging their feet. Its either legal or not. I haven't dug into the details, but based on this one line alone it sounds like this is abuse of power.

> Its either legal or not.

Perhaps I should introduce you to the legal system? Adobe proposes the merger, DoJ says they will sue to stop it. At that point, if the parties can't come to an agreement, it goes to the courts.

I think it's fine to argue our legal system is too slow, but again, this idea that regulators are just "dragging their feet" to slow things down is fundamentally incorrect. Regulators announced quite quickly they would fight this deal.

Re: Figma and Adobe abandon proposed merger

#562

Post by rurp » Mon, Dec 18, 2023, 5:33 PM UTC

JadoJodo wrote: post #218

While I do see this as great news (for all the reasons others have outlined), I wonder how this will impact VC in the future; If the current goal is for companies to get VC money, burn that cash for years and years and years, and then have a huge IPO or acquisition (that makes it all worth it), it would seem regulatory issues would start to scare away investment.

I think the main effect will be to push VC funded companies more towards sustainable growth, with less emphasis on growth at all costs. This strikes me as a good thing overall. That probably won't harm the fundraising prospects for solid businesses much if at all.

Highly speculative or hyped companies will probably have a somewhat more difficult time attracting VC investors, but so many of those turn out to be frauds or vaporware that I'm not too concerned. Companies like the ones that benefitted from the SPAC boom a couple years ago. Most of those ended up being highly overvalued companies that lost money for the post-VC investors.

Re: Figma and Adobe abandon proposed merger

#563

Post by ethanbond » Mon, Dec 18, 2023, 5:33 PM UTC

chiefalchemist wrote: post #540

ceejayoz wrote: post #332

Earlier quoted context omitted.

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.

Revenue actually is value (a subset of it) delivered to the business's customers. Enterprise value is a different thing. It's an important thing, but it's totally possible to have a business that delivers immense value to its customers and has very low enterprise value. We generally call these "not great businesses," but that doesn't make them not businesses.

Re: Figma and Adobe abandon proposed merger

#564

Post by j45 » Mon, Dec 18, 2023, 5:34 PM UTC

Since due diligence can take 12-24 months, I wonder what other than a much lower valuation being worth it caused this

Did Adobe get or figure out enough tips and tricks for their other products?

I have used adobe a bit over the years but no relation to either group.

That is a lot of subscription to walk away from for a company who is good at subscription, unless one of their parked projects was able to be written in webassembly.

Re: Figma and Adobe abandon proposed merger

#565

Post by jzl » Mon, Dec 18, 2023, 5:35 PM UTC

deweywsu wrote: post #544

hipadev23 wrote: post #461

Earlier quoted context omitted.

A CEO also owes it to their employees and investors to let everyone have a massive payday.

I think this is at the core of the rot of American society. The thinking that a CEO "owes" the marketing of their company so as to cash it in or even turn profits is, in my opinion, is a mark of the biggest moral ineptitude of the western world's thinking. Yes, I realize this is the 'norm', but it clashes with deep values of the people who aren't shareholders, but are no doubt vested in the product the company produc…

Here here. One word, nay, one letter in response:

X

Re: Figma and Adobe abandon proposed merger

#566

Post by ajmurmann » Mon, Dec 18, 2023, 5:35 PM UTC

consumer451 wrote: post #537

ajmurmann wrote: post #487

Earlier quoted context omitted.

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...

As I said, I'm quite happy with that, but if we do something, let's do it right and not half-assed.

Re: Figma and Adobe abandon proposed merger

#567

Post by marssaxman » Mon, Dec 18, 2023, 5:35 PM UTC

hipadev23 wrote: post #461

karaterobot wrote: post #245

On the one hand, as a designer who uses Figma every day, this is great news. On the other hand, the fact that Dylan Field was willing to do it in the first place felt like a bit of a heel turn. Yeah, it's a lot of money, I know. Maybe I'm alone in this, but I've already shifted my expectations for the long term direction of the product from "they can do no wrong" to "when is the other shoe going to drop?"

A CEO also owes it to their employees and investors to let everyone have a massive payday.

Do you actually believe that, or are you mocking a bit of startup-culture hubris?

Re: Figma and Adobe abandon proposed merger

#568

Post by hn_throwaway_99 » Mon, Dec 18, 2023, 5:36 PM UTC

matthewowen wrote: post #557

hn_throwaway_99 wrote: post #492

Earlier quoted context omitted.

> That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. Your understanding here is fundamentally wrong. Regulators in the US said very early on they were against this merger and were going to fight it. So most of what goes on in the meantime is Adobe and Figma (a) seeing if they can give…

This is a really inaccurate factual understanding of the sequence of events here: I would urge you to look at the actual timeline of events around the CMA and the DOJ before you keep spreading it.

This article about the DoJ prepping to sue to stop the deal is from February: https://www.bloomberg.com/news/articles/2023-02-23/doj-prepa...

The idea, proposed by the comment I was responding to, that regulators were just twiddling their thumbs and then only gave a thumbs down to Adobe after 15 months is wrong and completely misunderstands how the regulatory process for merger approval works.

Re: Figma and Adobe abandon proposed merger

#569

Post by Matticus_Rex » Mon, Dec 18, 2023, 5:36 PM UTC

camhart wrote: post #548

hn_throwaway_99 wrote: post #492

Earlier quoted context omitted.

> That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. Your understanding here is fundamentally wrong. Regulators in the US said very early on they were against this merger and were going to fight it. So most of what goes on in the meantime is Adobe and Figma (a) seeing if they can give…

It seems wrong/illegal that they can just "decide they're against the merger" and sink it by dragging their feet. Its either legal or not. I haven't dug into the details, but based on this one line alone it sounds like this is abuse of power.

Welcome to the world of antitrust, where almost everything is in a grey area and vibes-based. Never seen anyone who studied this area (and who didn't already work for a related Federal agency) who didn't conclude that this was a big mess, no matter their opinions on how it should work.

Re: Figma and Adobe abandon proposed merger

#570

Post by happytiger » Mon, Dec 18, 2023, 5:36 PM UTC

camhart wrote: post #548

hn_throwaway_99 wrote: post #492

Earlier quoted context omitted.

> That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. Your understanding here is fundamentally wrong. Regulators in the US said very early on they were against this merger and were going to fight it. So most of what goes on in the meantime is Adobe and Figma (a) seeing if they can give…

It seems wrong/illegal that they can just "decide they're against the merger" and sink it by dragging their feet. Its either legal or not. I haven't dug into the details, but based on this one line alone it sounds like this is abuse of power.

They literally indicated they were against it from early on, but Adobe tried to brute force it through and after careful review they said, “still no.”

Also, it’s not as if Figma has been sitting around all this time waiting for their dear Adobe to close. My understanding is that more than 500 new people have been hired since the deal was announced (total is now like 1300+) and growth continues.

I’m just glad Figma can now move on without having to do some “roadmap alignment exercise” or doing the “gradually falling apart” that so many Adobe acquisitions have done.

The real thought should be why Adobe was willing to pay twice the recent valuation to take Figma out as a competitor, and why only European regulators had a problem with it. They have a tendency to kneecap anyone who’s a substantive threat to their market, and we need viable competition in the space.

It may not have been particularly timely in terms of review, but it was never inconsistent. And we have no idea what kinds of delays were put on the deal, including delays from the Figma and Adobe teams.