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Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

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Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#81

Post by michaelbuddy »

ktamura wrote: post #55

This buyout is based on FUD, and FUD-based investment is a recipe for disaster. From the OP: >But for both Jet and Wal-Mart, Amazon’s frenzy of warehouse construction and fast delivery—as quickly as one-hour—have proved formidable. The retailer has logged three straight quarters of record profit while locking in an estimated 60 million members to its $99-per-year Prime service, cultivating a loyal customer base and g…

Jet, based on its promotional content is heavy into the home products category. Walmart would love to knock them out to absorb that competition to getting delivery and even subscription delivery of home products.

So it may be the price Walmart is willing to pay to ensure nobody is making Jet their new source for houseware products and avoiding the WalMart Brand. We also don't know what else Jet has in the pipeline, negotiating with them and through their research may be revealing more to WalMart.

all said, I hope Walmart doesn't buy Jet. I want Jet to exist on its own. Competition is the way forward in shopping, if not against Walmart, definitely against Amazon.

Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#82

Post by zd4akaq85a »

swingbridge wrote: post #67

Given the proposed price relative to funding raised it's likely the investors will get their money back plus a small return, employees with options will likely get nothing or perhaps a token amount (after all the preferred terms are cashed in) and the founder gets to sell off another highly unprofitable business. This will be chalked up as a "failed" startup but at least the investors get to take their money and play…

Really, you are claiming that if a company raised $570M and sold for $3B, the common shareholders will get screwed? Do you have some information we don't? The publicly reported valuation at the last funding round was $1.4B. Those would have to be some impossibly harsh terms to not leave well over $1B to the common shareholders.

Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#83

Post by brianbreslin »

ktamura wrote: post #55

This buyout is based on FUD, and FUD-based investment is a recipe for disaster. From the OP: >But for both Jet and Wal-Mart, Amazon’s frenzy of warehouse construction and fast delivery—as quickly as one-hour—have proved formidable. The retailer has logged three straight quarters of record profit while locking in an estimated 60 million members to its $99-per-year Prime service, cultivating a loyal customer base and g…

Walmart has already spent close to $12B funding walmart.com/labs and not made a dent in catching Amazon.

Jet has a super smart team looking at ways to gain margins in areas amazon is ignoring. short term their investors won't appreciate this buy.

Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#84

Post by cookiecaper »

chris11 wrote: post #25
_RPM wrote: post #19

Jet.com was founded in 2014. How did they get enough traction to be viable when there are so many other online retailers like Amazon, and all the other brick and mortar retailers that also have large online presence.

I think they've been spending a lot of money getting new users. They've been offering new accounts discounts, I think you can get 15% to 20% off right now. They've had a bunch of items show up on some discount shopping forums like slickdeals. I think they've lost money on some purchases.

We should understand that this is really what companies are buying when they buy a product. There seems to be an impression that companies buy technology because it's cool. That's almost never true, because they could hire similar engineers and build it out themselves for much cheaper than they could buy a company.

They buy the company because they want something that they can't easily replicate (which, again, is NOT the technology, because they can hire engineers and replicate your work product).

Typically it's one of these things:

a. they want your installed userbase. It's really hard to get people to use something new. If you have a lot of users, they will buy you even if your stuff is total crap so that they can get access to your users.

b. they want your intellectual property, like a patent and/or trademark portfolio. Patents are a great way to make companies think about buying your company instead of just ripping it off and copying it internally.

c. they want to retain the personal goodwill of someone they care about. For example, investors will often buy each others' portfolio companies, even when they're worthless, as a way to save face and ingratiate themselves one to another.

It's important, as entrepreneurs, that we understand what really goes into a big exit, and how it's not tech (unless you have patents, in which case they're buying the patents), but installed base.

Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#85

Post by happycube »

protomyth wrote: post #57
nommm-nommm wrote: post #38

Earlier quoted context omitted.

Unfortunately Walmart.com is now selling stuff from third party sellers.

dammit..... so is NewEgg Is someone actually not doing this?

Best Buy stopped doing that (thankfully), and I think Home Depot doesn't either.

Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#86

Post by cookiecaper »

rogerdpack wrote: post #72
morgante wrote: post #23

Earlier quoted context omitted.

Basically, a prominent founder who had previously battled Amazon. That led to a ton of funding which allowed for extremely aggressive marketing and customer acquisition, not to mention plenty of media coverage. If anyone can battle Amazon, it's probably Jet. I can see why Walmart would want Jet (and Marc) in their camp.

They've actually done very well with "hype" as it were. I guess this goes to show that you too can spend tons of VC dollars, make yourself "popular" and never make any money, but the popularity is enough to make you worth money, even though you're losing money. Fascinating. I almost wonder if they should sell now, just in case they run out of VC "at some point in the near future" and stuff hits the fan...or maybe the…

It's just a misunderstanding of what the acquiring company is actually buying. When a company acquires a startup, they're doing it so they can get control over that startup's users. They really don't care about the technical or financial details, they just want authority over those millions of eyeballs.

Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#88

Post by brianbreslin »

imcqueen wrote: post #58
chris11 wrote: post #40

Earlier quoted context omitted.

Yeah, I even remember a rumor going around that they were dropshipping for some items. If something was out of stock they would get it from newegg or amazon and send it to you.

I have a theory about this, it happened to us when we bought some childrens books on Jet. They came in the mail from Barnes and Noble with a packing slip that had a price higher than we paid included with it. It doesn't explain the Amazon example you mentioned, but I was under the impression they have special affiliate arrangements with 3rd party retailers and that they were somehow being allowed to invest their affi…

I received a box from amazon after making a purchase on Jet.

Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#89

Post by pdq »

shaqbert wrote: post #80

What asset does Jet have that it is worth anything close to $3bn? Loyal users? Nope. Their version of "prime" is the proverbial pig in a poke, as you need to buy that one before you can actually figure out if you like to become a longstanding customer (experience, logistics, price/value, positive surprises). Most users are just the coupon cutters who will switch to whatever next crazy person is offering loss leaders.…

They've got a three letter domain name. But that's worth a million bucks or so.

Re: Wal-Mart in Talks to Buy Web Retailer Jet.com for $3B

#90

Post by TimMeade »

grandalf wrote: post #43

While this is a definite failure for Jet's optimistic investors, it's likely a great opportunity for Wal-Mart to challenge Amazon, and a win for consumers. It's also a big win for OCaml. I tried shopping at Jet and while some of the prices were very good, others were worse than Amazon, and little things like product detail information, pictures, etc., were strongly subpar. Product search was also in serious need of t…

All i know is i shopped on the site exactly once. i ordered 2 cases of monster drinks at a fantastic price. Looked exactly like the amazon page. When they arrived they were 'monster hide safe cans'. Basically empty cans. When i tried to return they wanted 40% restocking. Total Fraud.
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