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Lina Khan points to Figma IPO as vindication of M&A scrutiny

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Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#91

Post by timr »

stackskipton wrote: post #67
timr wrote: post #27

Earlier quoted context omitted.

yep. So perhaps don’t block every potential transaction on flimsy pretense? Icing the transaction market seems like a great way to scare off potential competing acquirers in the name of social engineering. I don’t know. All I know is that Lina is out of power, and suddenly we see an upswing in M&A. Coincidence, I’m sure.

Problem is, by the time she got into power, everyone had consolidated so icing the transaction market was pretty much only outcome. Lina Khan was entering a market that was deeply flawed thanks to decades of bad policy.

> Problem is, by the time she got into power, everyone had consolidated so icing the transaction market was pretty much only outcome.

That's the talking point, but it doesn't survive even 30 seconds of thought. Yes, the biggest tech companies are very big -- debatably too big! -- but there are easily hundreds of smaller cap companies that you probably haven't heard of who are big enough to acquire startups. If anything those companies are the bulk of the M&A market, and the FTCs actions shut it all down [1].

The problem with the Khan view of the world (IMO) is that it was so fixated on the killing the whales that it didn't realize it was killing the other fish.

[1] By way of explanation: just by the nature of software economics, if you're big enough to make acquisitions in some niche industry, you probably own that industry (or are at least a duopoly player) and are therefore concerned that the FTC will target you.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#92

Post by mattmcknight »

boroboro4 wrote: post #84
mattmcknight wrote: post #81

So blocking a sale at a $20B valuation so the company can IPO at a $19.3B valuation 3 years later (a loss of $700M in value over 3 years) is a success?

Yes? Not everything is about capital owners and their profits. There is a lot of importance in the competition in the market and customers having choice of best products around. Figma competing with adobe is one of the examples. Even from capital point of view everyone is now forced to make their bet - either on adobe or figma, so it’s more efficient capital allocation too.

But how is the IPO a sign of success in that case?

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#93

Post by cogman10 »

mattmcknight wrote: post #81

So blocking a sale at a $20B valuation so the company can IPO at a $19.3B valuation 3 years later (a loss of $700M in value over 3 years) is a success?

Remember when HP bought palm and them proceeded to lay off the entire palm staff and kill all the palm products?

The market works best with competion. It's better for the workers, the customers, society and innovation in general.

A giant monopoly buying potential competitors is bad for everyone other than owners of that giant monopoly.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#94

Post by cogman10 »

mattmcknight wrote: post #90
svcphr wrote: post #85

Earlier quoted context omitted.

Its market cap is about $58b right now. Tripled in three years!

But the company only sold the shares at $19.3B.

Right, which gave them 19B (ish) to play with and they are an independent competitor to Adobe.

Mergers trigger layoffs

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#95

Post by alchemyzach »

mattmcknight wrote: post #92
boroboro4 wrote: post #84

Earlier quoted context omitted.

Yes? Not everything is about capital owners and their profits. There is a lot of importance in the competition in the market and customers having choice of best products around. Figma competing with adobe is one of the examples. Even from capital point of view everyone is now forced to make their bet - either on adobe or figma, so it’s more efficient capital allocation too.

But how is the IPO a sign of success in that case?

because it means they stayed independent and didnt get absorbed by a major megacorp that is already notorious for trying to corner the market of an entire industry and then over-charging

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#96

Post by dv_dt »

mattmcknight wrote: post #90
svcphr wrote: post #85

Earlier quoted context omitted.

Its market cap is about $58b right now. Tripled in three years!

But the company only sold the shares at $19.3B.

If they have to issue shares the higher valuation is significant

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#97

Post by zaptheimpaler »

mattmcknight wrote: post #81

So blocking a sale at a $20B valuation so the company can IPO at a $19.3B valuation 3 years later (a loss of $700M in value over 3 years) is a success?

The IPO only sold a few percentage of their shares. Even if we assume they sold all of them at opening price, by close the company and employees still hold like 80% of their shares that are worth triple what Adobe would have paid. Besides, antitrust is also about consumers, not JUST about businesses. We will all benefit immensely from real competition instead of having Adobe continue to dominate the market. We're talking about Adobe FFS, they have some crazy prices and shitty dark patterns around trials & cancellations.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#99

Post by snowwrestler »

timr wrote: post #63
tptacek wrote: post #37

Earlier quoted context omitted.

I'm not a Khan fan, like, at all, but by the time you're at the point where the FTC is getting involved in your M&A, you've crossed the threshold of success; all the signals to future startups about your path being promising have been sent.

I disagree. A lot of smaller acquisitions went away during the Khan reign, and from what I was hearing it wasn’t coincidental. Basically the random and aggressive nature of it was having a chilling effect on all M&A. Why would you go thorough the hassle of a small acquisition (as a buyer) if you knew there was a even a 10% chance that the FTC was going to take an interest?

Scrutiny scaled with the size of the buyer. When a top-five tech company is the buyer, it doesn’t really matter how small the purchased company is. Many of the most concerning acquisitions were small… Instagram had 13 employees when Facebook bought it.

When a huge company can easily acquire basically any small promising competitor, that is exactly what Khan (and many others of both parties) consider a problem. Chilling those sorts of deals was indeed the point.

But if the buyer was, say, the 312th largest tech company in the U.S., the chance of FTC intervention was essentially zero. If buyers in mid-size range were pointing at Khan to explain an M&A slow-down, I personally would not take them at their word.

Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny

#100

Post by monero-xmr »

kelnos wrote: post #74
monero-xmr wrote: post #62

Earlier quoted context omitted.

If I build a company I should be able to sell it to whoever I want for any reason. It’s my company

A "company" is a legal framework that we, society, has decided is allowed to exist. That also means that we are allowed to put any requirements and restrictions on it that we like. The health of our society is what matters, not the wealth of any particular founder.

Yes and in our democracy I can advocate for stronger property rights including over ownership of companies
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