[HN Gopher] MariaDB plunges nearly 40% in NYSE debut after SPAC ...
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MariaDB plunges nearly 40% in NYSE debut after SPAC merger
Author : highclass
Score : 127 points
Date : 2022-12-20 18:51 UTC (4 hours ago)
(HTM) web link (www.bizjournals.com)
(TXT) w3m dump (www.bizjournals.com)
| adriancr wrote:
| It's losing incredible amounts of money... how is it possible to
| still have 650M market cap when you lose almost as much money as
| you have revenue... and next year doesn't look that much
| better...
| usr1106 wrote:
| Losing money by doing real business (or in the case of losing
| money: attempting to do real business) would be a real problem
| for employees doing hard work. Losing money in this case here
| is gamblers' money and I have no feeling for gamblers.
| Unfortunately some employees' salaries are paid by gamblers
| (mine is), so it can have nasty consequences.
|
| Read the valuation of MariaDB earlier today in the paper paper
| (so before trading had started) and immediately thought: It
| can't be worth that much: Speculation, hype! Of course the new
| value determined by "the markets" is also a result of
| speculation. Just a different type of and less hype.
| strangattractor wrote:
| The SPAC is listed as a stock before there is really a company
| with a product. The value of that stock is defined by the
| capital put up for the SPAC. Once the SPAC merges with a real
| company the value of the stock is usually around whatever
| cash/capital put in originally.
| trynewideas wrote:
| "About 99% of the shareholders of special purpose acquisition
| company Angel Pond got their money back before the merger was
| completed, wiping out about nearly $263 million in capital that
| the companies had projected could be raised in the deal."
| netman21 wrote:
| That's my problem with SPACs. The people who put them together
| walk away with all the money. IronNet, 23andMe, and Adstra, had
| similar drops.
| exogeny wrote:
| I think the bigger problem is most of the companies that go
| public this way are dogshit money-losers that shouldn't be
| public in the first place.
| 1270018080 wrote:
| All SPACs, and some traditional IPOs, are a last ditch
| effort of dumping worthless equity onto naive retail
| investors.
| bombcar wrote:
| The fact that some recover and become "real companies"
| doesn't detract from this. Beware the IPO and the SPAC.
| Nifty3929 wrote:
| I don't think you should consider this a problem. They are
| providing a service for OTHER people who want to invest.
| Effectively, they are selling picks and shovels to people who
| want to mine gold. Barring SEC regs, it's not up to the
| "people who put them together" to judge whether or not the
| investment is a good one. The people who want to invest do,
| and take their chances.
| jmspring wrote:
| BlackSky, Getaround, others...
| monktastic1 wrote:
| SoFi (IPOE) too.
| dan-robertson wrote:
| Don't the shareholders get their money back with interest if
| they don't like the deal? I thought the way a SPAC works was
| roughly:
|
| - sponsors create a spac selling shares+warrants for, say,
| $10
|
| - they have two years to merge with a company
|
| - when the merger is sorted, shareholders can choose either
| (a) to get their money back + 3%, (b) to get their share in
| the resulting company and discard their warrant, or (c) to
| get their share and exercise their warrant to buy another
| share at some potentially good price
|
| - the sponsors get 20% of the pre-warrant equity in the
| spac's investment. I think they might have a long lock-out
| period before they can sell too
|
| - if no merger happens, investors get back their money with
| interest.
|
| So maybe I don't understand what you mean, or maybe I don't
| understand what a spac is, but isn't it bad for the sponsors
| if the shareholders don't like the merger? Maybe it's more
| subtle and it is a lot worse than coming up with a good
| merger but still better than not doing the spac at all.
| 0xbadc0de5 wrote:
| The corpse of MySQL just can't catch a break.
| pram wrote:
| MySQL is safely entombed within a gilded Oracle mausoleum.
| sanjayio wrote:
| The corpse? It's actively used by many companies in production.
| Unless you're referring to the branching point, which is more
| like the younger version than a corpse.
| ralph84 wrote:
| > It's actively used by many companies in production
|
| The problem is not many of them want to pay for it. $40
| million in ARR after 13 years and $227 million in funding
| isn't great.
| siquick wrote:
| I didn't even know you could pay for it
| karmicthreat wrote:
| I don't even know why I would want to pay for it.
| imhoguy wrote:
| Same here, first time I hear MariaDB has some corporation
| behind it, and now even IPO. I thought it is just
| community fork to avoid greedy Oracle. You just pull it
| from Linux distro repo or Docker and voila. Now I wonder
| is it going to end up like MySQL AB?
| jaboutboul wrote:
| Hopefully SPACs are cooked after this and the other recent bad
| SPAC news.
| bfeynman wrote:
| SPACs have been cooked since last year. The fact people are
| still doing it now during the worst time to make any public
| offering shows that they are completely out of options and need
| to cash out.
| lmm wrote:
| It's part of the terms of a SPAC that they have to find a
| deal within (usually) a year or return the money. There are
| hardly any new SPACs being started up, but the ones left over
| from the boom still have to make the best of what they've
| got.
| berkle4455 wrote:
| SPACs are setup by people who couldn't figure out how to launch a
| DAO token scam.
| dylan604 wrote:
| Just wait, the next thing will be major announcements for the
| release of NFTs that'll be super hero level SQL commands.
| danrocks wrote:
| People like Chamath Palihapitiya, who can probably do both. All
| while lecturing us about how bad our society is and how he's
| ashamed of having been part of Facebook (I'm sure he'll say the
| same about SPACs later).
| rchaud wrote:
| The grand-daddy of them all is the ICO.
| Amfy wrote:
| I tend to agree lol
| [deleted]
| spamizbad wrote:
| Nah, SPACs are just the luxury version of a DAO token scams.
| tofuahdude wrote:
| Or is it the other way around?
| Sebguer wrote:
| definitely the other way around, SPACs require up-front
| capital and a lot more connections!
| Yhippa wrote:
| Is MariaDB looking for different ways of investment to achieve
| their corporate goals?
| Amfy wrote:
| way too many IPOs & SPAC mergers recently...
| ibotty wrote:
| Can someone please explain what that means. I know MariaDB but
| understand pretty much nothing else here.
| greenyoda wrote:
| A description of how SPACs work can be found here:
| https://www.investopedia.com/terms/s/spac.asp
| darkwater wrote:
| From the link:
|
| > During a 2020-2021 boom period for SPACs, they attracted
| prominent names such as Goldman Sachs, Credit Suisse, and
| Deutsche Bank, in addition to retired or semiretired senior
| executives.
|
| Now, why retired or semi-retired senior exec who are most
| probably already swimming in money and have a certain age are
| even thinking about these investments instead of just spend
| the fortune they have and enjoy life? I guess I'll never be
| such an exec...
| celim307 wrote:
| They got that rich because for them the deal is the
| "juice". They prob retired because they couldn't invest as
| much time keeping up with it due to age but SPACs were such
| a feeding frenzy they could jump in and make a killing
| TylerE wrote:
| Beyond a certain point (which these guys are all well
| past), money is just a way of keeping score.
| smokel wrote:
| One possible reason why rich people do this, is that they
| like making money, which got them rich in the first place.
|
| Liking to make money and liking to enjoy money are
| different traits, I suppose.
| wpietri wrote:
| > Liking to make money and liking to enjoy money are
| different traits, I suppose.
|
| I get that. My dad was never that excited about making
| money, but he still described TurboTax as his favorite
| video game. Sometimes you just want to optimize the
| number, no matter what the number is.
| solardev wrote:
| It's really interesting how people can be so different,
| lol. One look at TurboTax and I feel deep existential
| dread, like it goes "deductions" to "heat death of the
| universe" in a few form fields.
| pkaye wrote:
| I'm guessing they stopped only because the SEC made some
| rule changes that made SPACs less lucrative.
|
| https://www.skadden.com/insights/publications/2022/03/sec-
| pr...
| noncoml wrote:
| An example that you don't have to just be smart and hardworking
| in order to succeed in business. You need to be lucky as well.
| MySQL was the right product at the right time.
|
| Edit: Forgot the "just to be smart and hardworking"
| ergonaught wrote:
| I assure you that MySQL-the-company was absolutely filled with
| very smart and very hardworking people.
| noncoml wrote:
| Sorry, my bad. I forgot to the "just". You don't have to
| _just_ be smart and hardworking.
| albertopv wrote:
| I don't really know the company, how is it possible to lose so
| much money? It seems to me that 350 employees are too many for
| such low sales, maybe half, or a third or even less, could be
| sustainable.
| cheriot wrote:
| We need a better mechanism for companies to go public. The
| traditional IPO is a ripoff and SPACS are scams. It's great that
| companies like MariaDB are able to raise money in public markets,
| though.
| TylerE wrote:
| We need a better mechanism than going public.
|
| That only leads to the inevitable next-quarter-itis that has
| taken down once great companies like HP and Bell Labs.
| cheriot wrote:
| My impression is that the incentives leading to "next-
| quarter-itis" are primarily executive compensation and
| investor's own timelines (influenced by long term cap gains
| only requiring one year).
|
| Keeping companies private just limits who can own them and
| doesn't help.
| samtho wrote:
| We need a new exchange that focuses on driving profits for
| shareholders over a longer term especially ones with wider
| goals. I think there is a market desire for companies that
| have positive social or public goals but still make sense
| organized as a for-profit. What we might get is less pan-
| flash/hyper-growth-startup-IPO and more organically grown
| companies with a certain amount of staying power and positive
| social or public goals.
|
| Our current model of "must have quarter over quarter growth"
| is a good a check in theory but it's too easy to cut corners
| in the short term instead of solving systemic, organizational
| problems which just kicks the can down the road.
| Nifty3929 wrote:
| Don't forget that things are the way they are for good
| reasons, or at least historically good reasons. At least with
| next-quarter-itis you're holding execs accountable for
| delivering _something_ relatively soon. It's an imperfect
| check-and-balance.
|
| Are you excited by the fact that Mark Z doesn't suffer from
| this disease with Meta and is spending $25B/yr on a virtual
| reality platform that won't provide returns for many years,
| if at all?
|
| Quarterly reporting (and the inevitable over-weighting of it)
| is there to PROTECT small-time investors.
| dan-robertson wrote:
| IPOs feel like more of a rip-off if you have easy access to
| private money and so don't really need to IPO to raise more.
| Maybe there won't be as much easy private money going forwards
| and raising from public markets will look more attractive.
|
| I'm also not very convinced that IPOs are a rip-off FWIW.
| smabie wrote:
| Direct listings seem fine-ish.
| arcticbull wrote:
| Especially since companies can, as of recently, issue new
| shares to sell as part of the listing (like they would in an
| IPO) instead of relying on insiders to provide the liquidity.
| cheriot wrote:
| I read somewhere that they end up costing as much as an IPO
| for some arcane reasons. Maybe that's not actually the case?
| jasmer wrote:
| That's a bit '-ish'.
|
| The bar is too high and there are huge numbers of really
| decent companies that need some kind of liquidity.
|
| We're just not set up for it. Maybe it's a matter of just
| bringing more attention to small caps, I don't know.
|
| Or another vehicle.
|
| There are just too many truly great value creating business
| out there whereupon it's very difficult for founders to get
| their accumulated value out of it. People have devoted their
| lives to doing some good thing, but it's pointless if it's
| hard to market the company. This absolutely has effects on
| the industry because it's literally not worth the devotion
| required to do so many things if there can be no upuside even
| a good scenario of making a decent company.
|
| It leaves way too much money in the hands of bankers and
| speculators and not those to took the biggest risks, made it
| work and likely created surpluses for everyone.
|
| Definitely we need a new model.
| mchusma wrote:
| The bar for direct listings is not because of the model its
| because of the costs to go public and be public. Small cap
| stocks are not what they used to be, and it seems like some
| process for reducing regulation on small cap stocks seems
| like it would benefit everyone.
| bombcar wrote:
| The reason they're rare is that the people involved prefer
| the ripoff (or the scam, if the ripoff won't work).
|
| Direct listing is most logical and if done right, the company
| will get the most of actual benefit.
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