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Figma and Adobe abandon proposed merger

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Re: Figma and Adobe abandon proposed merger

#841

Post by vl »

dubcanada wrote: post #750
reustle wrote: post #100

Earlier quoted context omitted.

> 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.

Here is how it is going to go, Adobe will tell their accountant to wire the money, the accountant will get the details from Figma. Adobe accountant will call their bank or maybe even go in to the branch. And tell them they are sending X to X. It will take a few stamps and confirmation and it will be done in about 5 mins. Some computer somewhere will go - 1 billion Adobe and + 1 billion Figma. On the bank side nothing…

The problem here is not doing the transfer, but holding 1 cool B in cash being ready to transfer. Even if it is in liquid assets, 3 days to liquidate 1B is quite short.

Re: Figma and Adobe abandon proposed merger

#842

Post by vl »

tsycho wrote: post #549

[Pure speculation; I don't work in the UI space at all, and at neither of these companies] I wonder if Adobe is secretly happy about this. They were acquiring Figma at the peak of the market (for growth stock/startup valuations) because of the existential risks that Figma was threatening, due to their collaborative development UX. But since then: * Startup valuations have fallen. Ignoring regulatory concerns, a new a…

I wonder if Figma will have to pay taxes on 1B they are getting as the fee.

Re: Figma and Adobe abandon proposed merger

#843

Post by obmelvin »

doctorpangloss wrote: post #643
RickS wrote: post #622

Earlier quoted context omitted.

(ex-Adobe, on a team highly related to an area where Figma out-executed XD, less knowledge about genAI stuff) > Adobe has probably captured back both mental and market share from Figma GenAI/Firefly's success is in a totally different domain to what Figma's doing. Figma's equivalent at Adobe is XD, which has never held a candle to Figma. The existential problem Adobe tried to buy their way out of still exists in the…

> (which is part of the basis of Firefly's success – significantly cleaner legal provenance on their training data). Yeah... I mean the pre-trained text encoder Firefly uses is filled with copyrighted, unlicensed-for-express-purpose training data. Firefly is successful in the same sense that DocuSign is, in that it is selling a holistic social experience, but I think maybe don't opine on "legal provenance on their tr…

The lowest estimate I see for Figma's ARR is $200m, so to suggest that even $500m is a high valuation is just untethered from the facts

Re: Figma and Adobe abandon proposed merger

#844

Post by BobaFloutist »

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.

I want it to be taken to absurd lengths. If and/or when the negative ramifications of discouraging mergers/acquisitions even begin to approach the damage that encouraging them has done to our economy and society, and only then, we can consider slowly reducing the pressure against.

Re: Figma and Adobe abandon proposed merger

#845

Post by 015a »

vlovich123 wrote: post #775

I think this is great. Figma gets a free undiluted infusion of 1B cash. I’m surprised break-up fees aren’t negotiated as an investment instead of a pure cash transfer. Sure it may have impacted company focus, it didn’t impact their revenue that much (1.5x growth vs 2x growth in previous years although that could have also been caused by an adverse economic climate with sales slowing across many companies and industri…

Fun fact: Figma's ARR in 2022 was around $400M. That $1B cash infusion could be invested in treasuries with an ARR of ~$50M; this isn't just a liquidity infusion of a billion dollars, it increases their net income by like 10%, basically free of charge.

Re: Figma and Adobe abandon proposed merger

#846

Post by vitaflo »

hipadev23 wrote: post #806
marssaxman wrote: post #567

Earlier quoted context omitted.

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

I absolutely believe it when the vast majority of the employees for the company in question were compensated with stock options.

This is the risk you take when you choose options over cash.

Re: Figma and Adobe abandon proposed merger

#847

Post by M2Ys4U »

vl wrote: post #841
dubcanada wrote: post #750

Earlier quoted context omitted.

Here is how it is going to go, Adobe will tell their accountant to wire the money, the accountant will get the details from Figma. Adobe accountant will call their bank or maybe even go in to the branch. And tell them they are sending X to X. It will take a few stamps and confirmation and it will be done in about 5 mins. Some computer somewhere will go - 1 billion Adobe and + 1 billion Figma. On the bank side nothing…

The problem here is not doing the transfer, but holding 1 cool B in cash being ready to transfer. Even if it is in liquid assets, 3 days to liquidate 1B is quite short.

It wouldn't surprise me if the timing of the execution of the termination agreement was agreed for after Adobe had liquidated assets.

Re: Figma and Adobe abandon proposed merger

#848

Post by golergka »

sowbug wrote: post #196
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?

What's wrong with selling goods and services for more than they cost?

Owning just one company that does that has a much worse risk profile than owning a little bit of many companies that do that. That's why founders, angel investors and employees want to sell their share of the company to a huge fund and then invest their money back in that fund.

Re: Figma and Adobe abandon proposed merger

#849

Post by moon_moon »

vl wrote: post #842
tsycho wrote: post #549

[Pure speculation; I don't work in the UI space at all, and at neither of these companies] I wonder if Adobe is secretly happy about this. They were acquiring Figma at the peak of the market (for growth stock/startup valuations) because of the existential risks that Figma was threatening, due to their collaborative development UX. But since then: * Startup valuations have fallen. Ignoring regulatory concerns, a new a…

I wonder if Figma will have to pay taxes on 1B they are getting as the fee.

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