Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

twitter.com

Post reply on HN
Print view View original

61–70 of 191 posts

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#61

Post by bretpiatt »

steven2012 wrote: post #37
keiferski wrote: post #22

Earlier quoted context omitted.

My best guesses: 1. Yahoo would rather spend cash than stock (possibly because they anticipate Yahoo stock going up in the future). If Yahoo thinks that $1 in stock today will be worth $2 in 3 years , it might make more sense to spend cash. This is a huge gamble, of course. 2. Cash is intrinsically more valuable than stock; in other words $1 cash != $1 stock. Yahoo may feel more comfortable spending $1 Billion cash t…

This doesn't make sense. Which CEO doesn't believe that their stock won't go up in 3 years? If they don't believe it, they should be fired. Cash is much more valuable than stock. Any CEO worth their salt would ALWAYS issue stock and never cash, since stock is essentially free (with some GAAP repercussions, but better that then spend cash). But it sounds like tumblr wanted cash instead of cash/stock. It doesn't matter…

Please see #194: http://www.bwater.com/Uploads/FileManager/Principles/Bridgew...

Cash is not always more valuable than stock. Complicated topic but I'll make one example related to this. As an investor would you rather have cash and pay taxes today on all of your gains or would you rather have stock in a reorganization where you could continue to hold and decide when and how to trigger the income?

The investors here chose cash and since I'm not part of the process I don't know why for certain, lots and lots of complicated factors at play.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#63

Post by zaidf »

This makes it pretty simple to judge Marissa Mayer's performance at least in the next year. If Tumblr shows any sign of failure, its pretty much equivalent of Marissa Mayer failing at Yahoo. If tumblr shows signs of progress not seen Pre-acquisition, it's a sign of an ex-Googler making a smart acquisition AND making it succeed in the long run.

Google is the best company when it comes to making large acquisitions work out for the parent company. Just see Analytics, YouTube etc.

Yahoo is probably one of the worst if you see how many of their 100M+ acquisitions have resulted in complete failure.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#64

Post by rgbrenner »

steven2012 wrote: post #57
rgbrenner wrote: post #50

Earlier quoted context omitted.

"This doesn't make sense. Which CEO doesn't believe that their stock won't go up in 3 years? If they don't believe it, they should be fired." This is clearly untrue. Which moron CEO at the head of a newspaper anticipates anything more than a very modest increase in their stock over the next few years? Most newspapers are very much aware of their problems. Do you think a CEOs job is to bury their head in the sand and…

A CEO's job is to increase shareholder value. End of story. This means increasing the stock price. So yes, I do believe that this statement is absolutely true. The CEO needs to figure out a way to increase shareholder value, whether they are Yahoo, or Washington Post, or New York Times, or Groupon. They are not supposed to sit around and maintain dividends. Whether it's breaking into new businesses, selling their cur…

"3 years is MORE than enough time"

So you're saying there were no CEOs at the end of 2008 that thought that even with all of the work they were doing to improve their company, that the recession would have net negative effect on their business. Do you really believe that?

And as this applies to Yahoo... we have no idea how bullish Mayer is on Yahoo.. maybe she thinks the company is going to grow very rapidly over the next few years, and doesnt want to give up a single share. If she is MORE bullish on Yahoo than the market, then Mayer would have considered Tumblr's demand for X number of shares unreasonable.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#66

Post by diego »

pkmehta wrote: post #47
minimaxir wrote: post #36

Per AllThingsD, "There were no other competing bids, despite reports, to snap up the New York-based hipster blogging service." http://allthingsd.com/20130519/yahoo-tumblrs-for-cool-board-...

Can someone explain to me why you spend $1.1B on this if the company was running out of cash, had investors skittish about funding a new round and there were no competing bids. Why didn't Yahoo just let them get desperate and buy them then? With an all-cash deal, it seems they're less interested in the team than the platform so seems they could have picked that up in a few months for significantly less. What am I mis…

If you and Marissa Mayer want the last burger in the world, how much is it worth? What if you're Mark Zuckerberg, and it's really important to her that you don't get a taste of that burger? Maybe she doesn't even like burgers.

Factors like the cost of the burger, or how fresh/tasty it is, become less important.

Also, all-cash doesn't mean what you think it means. The currency used to pay for a company (cash, stock, pork bellies, whatever) is independent of the vesting schedules of the employees/founders acquired. Typically investors receive most stock/cash immediately, while employees receive some up front and the rest over a period of time that is negotiable. 3-4 years is standard. Some deals are front-loaded (more than 50% in the first half) and others are back-loaded (the reverse).

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#67

Post by emmelie »

pkmehta wrote: post #47
minimaxir wrote: post #36

Per AllThingsD, "There were no other competing bids, despite reports, to snap up the New York-based hipster blogging service." http://allthingsd.com/20130519/yahoo-tumblrs-for-cool-board-...

Can someone explain to me why you spend $1.1B on this if the company was running out of cash, had investors skittish about funding a new round and there were no competing bids. Why didn't Yahoo just let them get desperate and buy them then? With an all-cash deal, it seems they're less interested in the team than the platform so seems they could have picked that up in a few months for significantly less. What am I mis…

You ask very good questions.

This looks like Yahoo's board of directors are funnelling cash to the Tumblr investors.

Perhaps there are (hidden) connections between the two groups?

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#68

Post by DocG »

I most curious what does it mean for me, as tumblr poster. Couple of months ago I started OC artwork blog on tumblr.

Now I must probably wait until this things settles, to know is it worth investing my time or not, what changes they are going to make etc.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#69

Post by wildgift »

technoslut wrote: post #53
rhizome wrote: post #43

Earlier quoted context omitted.

Flickr had a major interface refresh a couple of years ago, and I'm also pretty sure Flickr has lots and lots of paying customers . So, it may have already "panned out," in a "don't mess with success" sense, depending on what that means in the context of Tumblr.

Flickr updated their site a few months ago along with the release with their new iPhone app. It still doesn't feel like a modern site and it doesn't work as well as it should. Supposedly there is a new Flickr being shown off tomorrow and hopefully Yahoo rebuilt the site from the ground up.

It needs an overhaul, but it does what I need, which is share a few hundred images, broken up into sets. I've tried a couple other sites and apps, and haven't switched yet.

Re: The Yahoo board has approved a deal to pay $1.1 billion in cash for Tumblr

#70

Post by brown9-2 »

sudonim wrote: post #3

How is this becoming public information so quickly? Is this being leaked? It seems like it's not beneficial for this to become public knowledge for anyone except Tumblr if they are trying to start a bidding war.

This isn't an unsolicited deal, the CEO brought it to the board for approval after completing negotiations.

This is a done deal now, it's not the start of Tumblr's bidding process.

Post reply on HN