[HN Gopher] Lina Khan points to Figma IPO as vindication of M&A ...
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Lina Khan points to Figma IPO as vindication of M&A scrutiny
Author : bingden
Score : 354 points
Date : 2025-08-02 21:39 UTC (1 days ago)
(HTM) web link (techcrunch.com)
(TXT) w3m dump (techcrunch.com)
| grandmczeb wrote:
| So what is iRobot's bankruptcy evidence of?
| sealeck wrote:
| That if Amazon acquired it, this would enable it to
| horizontally integrate and take control of yet another market?
| This, eventually, woudl lead to lower prices for consumers...
| bryant wrote:
| > This, eventually, woudl lead to lower prices for
| consumers...
|
| What incentive would Amazon have to drop prices after
| vertical integration is done?
| tomrod wrote:
| Economies of scope are the common claim.
| margalabargala wrote:
| No, that's what lowers Amazon's costs.
|
| Why would Amazon, having lowered their costs, pass that
| savings on to the consumer when they could simply profit
| more?
| dgfitz wrote:
| Are you asking about supply and demand?
| roughly wrote:
| I believe he's asking why the parent poster was
| suggesting monopolistic consolidation would be good for
| the consumer, contrary to what all theory and experience
| would suggest.
| tomrod wrote:
| *shrug* I gave him the argument baseline argument
| commonly known because it claims that costs become lower
| (and thus the merged entity claims to pass lower costs to
| the consumer) that normally flies at the FTC.
| margalabargala wrote:
| The context of the conversation is one of a horizontal
| monopoly, in a market that's near saturation, operated by
| a megacorporation that could afford to ignore profits or
| losses indefinitely, in the specific industry of robot
| vaccuums. So maybe the question is "why on earth would
| someone think supply and demand _does_ apply here? "
| Spooky23 wrote:
| With respect to Amazon? Give us all a break.
| bee_rider wrote:
| This is sarcasm, right? The "eventually," the ellipses, and
| the underlying ridiculousness lead me to believe it is
| sarcasm.
| sealeck wrote:
| Yes
| CamperBob2 wrote:
| Evidence that you can only coast for so long on patents.
| Eventually you have to get back to work and provide value to
| customers.
| bornfreddy wrote:
| And also that the patents matter only if your competitors are
| actually bound by them. If not (China) then there is zero
| value in them.
| conscion wrote:
| That Amazon wasn't acquiring it for it's business acumen and
| was actually acquiring it for some secondary purpose (i.e.
| market consolidation, data extraction)
| klooney wrote:
| The fact that Chinese dominance in the world of atoms made its
| position untenable.
| richwater wrote:
| Lina Khan's obsession with "big is bad", especially her
| preexisting prejudice of Big Tech should have disqualified her
| from any position well before she took the wheel.
|
| How many times did the FTC fail in court under her watch? More
| than I can count on two hands.
|
| Meanwhile local and state utility and cable tv monopolies
| continue to _flourish_ without so much as a peep.
| bix6 wrote:
| You expect a perfect success rate against the highest paid
| lawyers in the world? At least she was trying to enforce
| antitrust for once.
|
| Big is bad bro. There's like 5 companies carrying the entire
| S&P rn how is that good for anyone outside of those 5
| companies?
| richwater wrote:
| > Big is bad bro
|
| Using "big" as a synonym for "consumers are worse off than
| alternatives" does not do anyone justice.
|
| > At least she was trying to enforce antitrust for once.
|
| Her prejudice against big tech and pretty much ignoring any
| other industries is not something to be proud of.
| redserk wrote:
| Big tech has been ignored for quite some time compared to
| other industries.
| nicoburns wrote:
| Big doesn't necessarily mean that consumers will be worse
| off than small. Just like having a dictator doesn't
| neccesarily mean that citizens will be worse off then in a
| democracy. What it does mean in both cases is that if the
| powerful entity decides to abuse their power for their own
| gain, it's very difficult (albeit not entirely impossible)
| to do anything about it. It's therefore better in the long-
| run to preempt this and bias towards smaller entities that
| are each less powerful.
| bix6 wrote:
| I'm unclear what your first point is saying
|
| FTC under her blocked Kroger/Albertsons, blocked
| Tapestry/Capri, ended non-competes, enacted click to
| cancel, made major strides on right to repair, etc. in
| addition to all the "prejudice against big tech" which are
| the titans of industry right now...
| lemoncookiechip wrote:
| - Three major court wins (Illumina, Tapestry/Capri,
| Kroger/Albertsons), multiple deals dropped.
|
| -Over $1.5B refunded. Significant settlements (Epic,
| MoneyGram, Amazon delivery drivers, etc.)
|
| - Junk-fees ban, click-to-cancel rule (You can thank the
| current administration for walking back on this), non-
| compete ban.
|
| -Right to repair, data privacy enforcement, health-care
| pricing interventions ( reduced out-of-pocket costs for
| inhalers and insulin).
| jeffbee wrote:
| Under Khan, the FTC has abandoned the standard of consumer
| harm, and now just blocks mergers based on vibes. I really
| liked this article criticizing her approach:
|
| https://insights.som.yale.edu/insights/the-ftcs-antitrust-
| ov...
| xrd wrote:
| I stopped reading when they defended Albertsons and
| Kroger merger. Can anyone defend the consolidation of
| grocery stores with a straight face? Walmart has
| obliterated any competition and it has destroyed local
| food sources everywhere. They can do it at scale that no
| one can compete with. If the only solution is to further
| consolidate then we might as well just hand over the
| government to Walmart.
| jeffbee wrote:
| And yet, groceries have never been cheaper. So the
| question becomes which do you want: consumer benefits, or
| your aesthetic preferences regarding how big a company
| should be?
| xrd wrote:
| Should jobs be a factor as well? I see a lot of job loss
| in small town Iowa and Nebraska. I don't live there and
| people there have definitely voted with their wallets.
|
| Food plus quality price index in Japan and France look
| better to me despite the lack of Walmarts.
|
| And, I read some things about price collusion of the
| major grocers during the pandemic that makes me
| concerned.
|
| I will say, thanks for being a human and discussing this
| as a human. Too many bots on HN lately.
| jeffbee wrote:
| You can analyze it on that basis, but it's a political
| question. Is the grocery industry a jobs program?
| bix6 wrote:
| Groceries were cheapest around 2000 and have gotten more
| expensive since? Particularly 2020 on
| saagarjha wrote:
| Groceries have gotten cheaper because the companies
| selling it pass off their negative externalities to
| society.
| elefanten wrote:
| Doesn't have to be a perfect success rate... how about just
| something other than abysmal failure rate?
|
| Asserting a sloganized refrain is not very convincing. Make a
| real argument. Here are some counterpoints to "big is bad"
| Neobrandeisianism: -Scale enables better economics for
| certain businesses which consumers and other businesses then
| benefit from. -Large size allows additional speculative
| cutting edge R&D funding which the whole world benefits from
| even if it never pays off. -Being big on its own is almost
| never a cheat code to permanent monopoly / monopsony lock-in,
| especially in the technology business. That comes from actual
| anti-competitive behavior or regulatory capture (which ARE
| the parts that should be regulated, rather than targeting or
| preventing size for its own sake).
|
| The S&P point is more than a bit overstated and it also
| doesn't really matter? The subset of the S&P that's
| performing well will naturally get weighted higher over time,
| until the performance changes. It doesn't really matter if
| the S&P is driven by 5 enormous companies or 500 equally-
| sized ones. Whatever works at the moment is what gets
| rewarded with capital -- that's the point of the system and
| it's been more effective than any alternatives. Besides, it'd
| be poor investing practice to be literally all-in on the S&P.
| bix6 wrote:
| Scale enables big companies like Amazon and Walmart to
| force anti-competitive vendor and pricing agreements that
| harm small businesses.
|
| Meta is top 10 for DC lobbying. No regulatory capture to
| see here.
| lvl155 wrote:
| Big is bad? She went up against Amazon which is literally one
| company that delivered on lowering costs to consumers. She
| doesn't understand the fact that there are NATURAL monopolies
| outside of utilities. You would know this if your training is
| more than a couple of intro level courses in economics.
|
| And why is it that no one is talking about the biggest
| vertical and horizontal roll ups in all of corporate America
| in healthcare? Interesting.
| elefanten wrote:
| Her opinion should not be taken seriously on the matter. It's
| not just the empirically terrible track record she had as a
| regulator and the baffling cases she brought to bear (imo proof
| of your point that she had an overgeneralized bias). It's also
| that she was demonstrably inexperienced at the time she was
| selected! It was clearly performative political appointment,
| which the Biden administration was pretty egregious about (and
| so have both Trump administrations, this is not a political
| point).
|
| The essay (literally, a homework assignment she did at law
| school) for which she became famous that criticizes Amazon for
| being big is so chock full of errors, misconstructions and
| faulty logic, that it's an indictment of some really poor
| political habits and instincts that the US is prone to. That
| due diligence in vetting her as a rigorous and informed thinker
| on the topic failed is an unequivocal failure.
| gruez wrote:
| >The essay (literally, a homework assignment she did at law
| school) for which she became famous that criticizes Amazon
| for being big is so chock full of errors, misconstructions
| and faulty logic, that it's an indictment of some really poor
| political habits and instincts that the US is prone to.
|
| source?
| elefanten wrote:
| https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.
| p...
|
| She got boosted by an insurgent group of law professors who
| spearhead whats called the Neobrandeis moment. Their theory
| is that anti-trust should be preemptively enforced against
| size for its own sake.
|
| This is the article she wrote for her law review as a law
| student which put her on their radar and they started
| calling her a "rising star" etc etc, which snowballed into
| the performative appointment by the Biden admin.
|
| Feel free to read through it.
| estearum wrote:
| Performative and ineffective but somehow actually
| deterred a lot of M&A? How does that make sense?
| linotype wrote:
| What errors?
| elefanten wrote:
| A lot beyond the scope of the time I have to comment
| here. Read it with an open mind, knowledge of tech
| business, knowledge of how things unfolded since it was
| published and see for yourself.
|
| But some short hand:
|
| -Assumes vertical integration is necessarily abusive
|
| -Assumes lowering price is necessarily a setup for anti-
| competitive practices. This one's particularly ironic
| because lowering prices is definitely a first-order good
| for consumers and businesses that buy those goods. Bezos'
| famous saying was "your margin is my opportunity" ---
| would you rather the standard continue to be massive
| retailer markup profit that goes straight to retail
| corps?
|
| -Vague scare tactic claims that expanding into media
| production etc will somehow (yadda yadda, Step 2: ???)
| lead to monopolies in every category they enter.
|
| The TLDR of the problem with Neobrandeis is it forms a
| very opinionated paranoid notion that size can only lead
| to bad things and no good things. It is a lazy dodge
| around the traditional responsibility of regulators to
| identify and regulate _actual anti-competitive behavior_
| when it _actually happens_ By constraining companies from
| using any form of size or integration-related advantage,
| it lowers the pressure to actually be competitive and
| innovative for everyone else. I'm not saying everything
| should be unconditionally allowed, there's a balance to
| strike. But when you just have a blunt "anti-size"
| hammer, you're gonna do collateral damage to a healthy
| competitive ecosystem in a damaging way.
| Spooky23 wrote:
| We've seen this TV show before, but nobody paid
| attention. The magnificent 7 are essentially the
| ITT/LTV/Litton of the 1960s reborn. GE is the other one
| of more recent memory.
|
| Massive diversified entities get bureaucratic, unwieldy
| and ineffective over time.
| radiofreeeuropa wrote:
| > It is a lazy dodge around the traditional
| responsibility of regulators to identify and regulate
| actual anti-competitive behavior when it actually happens
|
| Traditional since the '70s, when Chicago school jackasses
| got their way and all but destroyed antitrust
| enforcement, in practice.
|
| A shift back would be great. Let's get a little more
| traditional.
| lvl155 wrote:
| What gets me about this Lina Khan hero worshipping is that
| she has ZERO real-world experience. It'd be one thing if she
| crafted a worthy law career in fighting big corp. She never
| put in any hard work. She essentially an influencer.
| sealeck wrote:
| > especially her preexisting prejudice of Big Tech should have
| disqualified her from any position well before she took the
| wheel.
|
| The purpose of the FTC is literally to take regulatory action
| to prevent unfair competition. Your argument is that you
| shouldn't appoint a commissioner on the basis that they think
| large tech companies are engaging in anti-competitive
| behaviour?? Note that this position isn't playing dictator; the
| FTC is subject to judicial oversight.
|
| > Meanwhile local and state utility and cable tv monopolies
| continue to _flourish_ without so much as a peep.
|
| How do we know this isn't just your preexisting prejudice of
| cable companies? Maybe you've just got an obsession with "big
| [cable] is bad"? On a serious note - it seems that you _do_
| agree with antitrust regulation, just not against
| Facebook/Amazon for some reason (and only against Comcast)??
| lvl155 wrote:
| I don't get the downvotes. He's just stating his opinion. Lina
| Khan had zero real-world experience. She wrote ONE widely
| circulated opinion piece in law school. It contained barely any
| rigorous economic analysis. This is akin to giving authority to
| some 21-yo philosophy major to direct the entire direction of
| US AI policies.
| Apocryphon wrote:
| What AI experience did Sam Altman have before becoming OpenAI
| CEO? Wasn't he just a VC wunderkind beforehand?
| lvl155 wrote:
| I am not a big Sam Altman fan but this is not a good comp.
| Sam is an insider in SV and one of the biggest at that. He
| knows everyone. You are basically saying Sam didn't know
| anything about AI yet he is one of OpenAI's founding
| members. Unlike Elon, at least Sam knows a thing or two
| about actual software dev.
| Apocryphon wrote:
| Okay, what experience did Musk have in aerospace when he
| founded SpaceX?
| lvl155 wrote:
| He had money. Why do you keep conflating people doing
| business using their own money with appointing government
| officials with zero experience?
| Apocryphon wrote:
| I thought this place was against credentialism and all
| about experimentation utilizing people who show promise?
| Whither "talent investing"?
| bix6 wrote:
| founders would ultimately benefit from "a world in which you have
| six or seven or eight potential suitors" rather than "just one or
| two."
|
| Real talk Lina
| timr wrote:
| 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.
| tptacek wrote:
| 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.
| Spartan-S63 wrote:
| In fact, if future competition is contingent on successful
| M&A activity, that's a sign of such deep organizational rot
| that you either have to radically transform management or
| ride the company down.
|
| Not everything needs to last and companies that can't
| radically transform their management culture to enable
| innovation and competition deserve to wane until they're in
| a steady-state or they go under to allow for a new
| competitor to rise.
| elefanten wrote:
| I agree with your general point, but Khan was excessively
| trigger happy in a way that highlights exceptions to your
| observation. E.g. blocking Meta acquisition of Within was
| nonsense that did nothing to validate the concept of VR
| fitness as a promising category (anytime soon)
|
| Edit: Within, not Withings
| miguelazo wrote:
| Just because VR fitness was a flop hardly proves your
| point. Most people expected that to happen.
| timr wrote:
| 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?
| snowwrestler wrote:
| 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.
| timr wrote:
| > Scrutiny scaled with the size of the buyer.
|
| Maybe, but it doesn't take a lot of scrutiny to scare the
| crap out of you if you're a major player in some niche
| industry with a few hundred million in ARR. Which is most
| public companies.
|
| That's the perverse thing about this stuff: the biggest
| players are probably the least sensitive to the
| regulatory burden.
| root_axis wrote:
| > _it doesn 't take a lot of scrutiny to scare the crap
| out of you if you're a major player in some niche
| industry_
|
| This "scare" characterization isn't how anybody thinks in
| reality. Everything is a cost benefit analysis, the risk
| that you'll come under FTC scrutiny is going to be a
| factor weighed against the potential gains of the
| acquisition. Companies understand their own place in the
| market relative to their size and dominance, the
| overwhelming majority of companies know they basically
| have nothing to fear from the FTC ever.
| benreesman wrote:
| Not even a little. The biggest players are the most
| sensitive to this kind of thing. Imagine an independent
| Instagram _and_ Whatsapp running around. That 's a
| fucking nightmare for Mark.
|
| It is precisely the companies that have lost the internal
| capacity to innovate (Meta) that have the most to lose
| and the companies that were going extremely well already
| (Instagram had a bunch of suitors and could have chosen
| to punch out later in the process, I heard this from
| Krieger in person) who have the most to gain.
|
| The losers here are people who can buy and hold FAANG as
| a basket and just sit back and let the market transfer
| all wealth to pensioners. The winners are founders,
| employees, new startups, consumers, cities with more
| offices in them, that's a partial list.
| sokoloff wrote:
| > Many of the most concerning acquisitions were small...
| Instagram had 13 employees when Facebook bought it.
|
| Instagram was bought for $1B. Whether they had 13 or 1300
| employees, a $1B acquisition isn't small in an anti-trust
| sense.
| NewJazz wrote:
| Do you have a source for these claims? Specifically
| smaller M/As being skipped or killed.
| benreesman wrote:
| Figma's market capitalization as of the close on Friday is
| 59 billion and change. Adobe offered 20 billion.
|
| Because the shares were sold to the public and now trade at
| three times what the absolute ceiling on their value would
| have been, and because everything from early options to
| later stage RSU equity comp structures will now convert at
| the full market valuation, the preference ladder and
| ratchets and all the other ways you can get Windsurf'd as
| an early employee (sometimes even a founder!) don't kick
| in, so the rank-and-file equity holder is rich now too.
|
| Future founders now have another well-heeled public suitor.
|
| If you even remotely believe in Hacker News style "tech
| startups make people rich and this is good" stuff, then
| this is a grand-slam home run win by any measure.
|
| Maybe time to re-evaluate what you think of Lina Khan's
| policy agenda in light of data on the outcomes? It's of
| course possible there is some other data point you have in
| mind where it went poorly and you keep your opinion. But if
| that opinion was of the bland "regulation is bad for tech
| startup people trying to get rich" variety, seems maybe
| time for a re-think?
| stackskipton wrote:
| 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.
| timr wrote:
| > 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.
| stackskipton wrote:
| What is your argument? That smaller roll ups could not
| happen and that was bad? Alot of smaller M&A in tech
| space was bad, it just was not Figma buying Adobe bad.
|
| I think startups exiting via M&A is part of the problem.
| It creates perverse incentives which is basically fuck
| profits, squash all competition while lighting money on
| fire and THEN when you are so embedded, sell the company
| so original investors get their money back and new owners
| screw over everyone knowing there tunneling out of your
| really thick walls is going to be extremely difficult.
|
| In a model where company had to turn a profit and
| investors would slowly make their money back, it would
| probably be net win.
| timr wrote:
| > Alot of smaller M&A in tech space was bad, it just was
| not Figma buying Adobe bad.
|
| Yeah, you're gonna have to defend that assertion.
|
| > I think startups exiting via M&A is part of the
| problem. It creates perverse incentives which is
| basically fuck profits, squash all competition while
| lighting money on fire and THEN when you are so embedded,
| screw over everyone knowing there tunneling out of your
| really thick walls is going to be extremely difficult.
|
| I hate to burst your bubble, but the chances of a small
| startup getting acquired while "lighting money on fire"
| is basically zero. You have a particularly narrow-focused
| lens on startups that is driven by a few high profile
| stories. When you're on that sort of YOLO rocket ship,
| you're not looking for acquisition -- if it happens,
| something went wrong.
|
| So yes, part of my argument is that smaller roll ups
| could not happen, and that market looks nothing like what
| you're describing.
| digitaltrees wrote:
| Her point is that m&a isn't the best thing for the economy or
| founders. Unchecked m&a creates cannibal capitalism where one
| mega zombie firm scoops up all competition.
| refurb wrote:
| Yet there are plenty of examples of monopoly or near
| monopoly businesses getting their butts handed to them by
| startups.
|
| Yahoo, BlackBerry, Kodak, Nokia, Sears.
|
| So it's clearly not "once you have a monopoly it's game
| over for competition". Markets aren't stagnant, and as they
| change it provides opportunities for new competitors to do
| that "new thing" better than the monopolies.
| oarla wrote:
| And how many businesses do you estimate have been killed
| or eliminated because of unchecked m&a? Expanding the
| data set to include non-tech industries indicates
| strongly that it's not always the case that a big
| monopoly will eventually fail. Healthcare for example is
| filled with instances of bigger companies acquiring
| smaller ones and killing the competition to their
| product, a quick Google search will show you that.
| refurb wrote:
| Can you give me a specific example? Last I checked no
| insurer has more than 30% market share.
| neom wrote:
| An interesting read on this kinda thing in South Korea:
| https://www.reddal.com/insights/growing-korean-smes-and-
| star...
| justinclift wrote:
| Possibly interestingly, it would have been good for
| _customers_ of VMware if their acquisition by Broadcom had
| been blocked.
|
| The VMware shareholder's value though probably went up from
| that deal.
| Thorrez wrote:
| Lina claims she let the vast majority of deals through. I
| wonder what the data shows.
|
| >While her aggressive stance led to intense criticism from
| corners of the tech industry, she defended her approach by
| saying that only a tiny percentage of deals received "a
| second look"
| pclmulqdq wrote:
| Even if "a tiny percentage" is 1%, that's a huge amount
| more than a normal FTC.
| alephnerd wrote:
| Except the majority of the Figma IPO was captured by banks due
| to it's severe pop. So while everyone made a lot of money, the
| overwhelming majority went to the underwriters [0].
|
| The founding team at Figma would have gotten a similar amount
| much sooner if the acquisition was let thru OR if the
| underwriters didn't screw them over by underpricing at $33.
|
| [0] - https://pitchbook.com/news/articles/figma-ipo-pop-
| spotlight-...
| el_nahual wrote:
| The IPO "pop" is not captured by banks: it's captured by the
| banks customers that pre-buy at the IPO price.
|
| Basically, before an IPO, the underwriters take the company
| on a "roadshow" in which they pitch the IPO to potential
| buyers.
|
| There's a hierarchy of these: the best are very large buyers
| that place large orders and trade seldom. Pensions, sovereign
| wealth funds, etc.
|
| Those buyers then make offers ("I'll buy 50MM at $100"),
| which the bank uses to set the IPO price. The bank then gives
| them an allocation.
|
| If you're a high (10MM+) net worth individual that banks with
| one of the underwriters, you can often get an allocation in
| an IPO. The richer you are, the more of an allocation you can
| get.
|
| When an IPO pops, it's these people that get the benefit.
|
| The benefit for the company is that the stock is owned by
| prime people the bank selected: you crucially _don't_ want to
| just sell to the highest bidder if they are going to dump the
| stock immediately after the pop (or that's the theory, at
| least). They have stable shareholders with a vision aligned
| with management.
|
| The benefit to the bank is that they get to reward their
| customers with access to profitable trades--but the bank
| itself does not profit.
| SilverElfin wrote:
| Seems undemocratic. Everyday folks can't buy even though
| they would want to
| conradev wrote:
| It's just a bulk discount: everyday folks simply can't be
| relied upon to buy hundreds of millions of dollars the
| stuff and that's what the company is selling. Little fish
| can buy in, but only if the big fish provide liquidity in
| the first place! In other words: someone needs to be paid
| to sell it and big buyers need to be incentivized to buy
| it.
|
| Ultimately the IPO price is driven by supply and demand
| with a limited supply: price will go down (a bit) when
| the lockout period ends and more supply comes online.
| BrenBarn wrote:
| Saying "big buyers need to be incentivized to buy it" is
| just another way of saying it's undemocratic. The
| democratic version would be that there are no big buyers
| and your IPO gets however much money it gets from small
| investors and that's it. There don't need to be any
| companies with a $45 billion IPO.
| virgilp wrote:
| I feel like complaining about things being "undemocratic"
| is like complaining about a software system's
| architecture that "it's not microservices". Not
| everything needs to be - and some things would be
| actively harmed by making them "democratic". I wouldn't
| want drug approval to be a democratic process.
|
| Raising capital can be done "democratically" if the
| founders want to. They can use direct listing. IPO is an
| option, not an obligation.
| markdown wrote:
| > Not everything needs to be
|
| Not everything, sure. But this one more than most, needs
| to be democratic. If you don't see the wealth inequality
| today in which the 1% own 50% of the worlds wealth, and
| you don't see where this is inevitably going to lead,
| then I don't know what to say.
|
| Stay woke at r/latestagecapitalism
| benreesman wrote:
| I'm pretty critical of how late capitalism is shaping up
| (I pretty routinely get called a leftist radical here on
| Hacker News which is increasingly Thiel-Aligned Psycho
| News).
|
| With that said, lots of options exist for a company like
| Figma doing a public listing: when you're the belle of
| the ball you can list how you want. Google did a pretty
| unconventional Dutch Auction thing IIRC.
|
| In this instance the Figma folks decided they wanted an
| IPO pop and had the underwriters set it up that way. They
| were paying some premium (to institutional investors) to
| get one of many intangibles that are attached to that
| (like a bunch of press about how hot the stock is).
|
| In a world where it was a no-brainer that this was going
| to be another mediocre Adobe product line rent seeking
| from here to the horizon, I'm pretty OK with how this
| turned out.
| JustExAWS wrote:
| And when Google did it, it was considered a disaster
|
| Because when Google did it, it was a disaster?
|
| https://www.cnbc.com/2014/08/18/pisani-googles-ipo-was-a-
| dis...
|
| And "rent seeking" isn't "The company is selling a
| product or service they make in a manner I don't agree
| with"
| saagarjha wrote:
| Why can't a bunch of little fish provide the liquidity?
| Especially since they can provide more without the bulk
| discount?
| LudwigNagasena wrote:
| It makes no sense in the digital age. It costs almost
| nothing to solicit demand curves. And you can still do
| wasteful roadshows and presentations for special buyers.
| andruby wrote:
| Capital and Finance was never democratic. And I doubt it
| ever will. It's literally those with more money have more
| power.
| bornfreddy wrote:
| It is undemocratic, but it is capitalistic.
| tossandthrow wrote:
| Even Adam Smith would argue that monopolies are bad - the
| fact that you are deacriminated upon to buy capital is
| the direct opposite of capitalism.
| hgomersall wrote:
| Adam Smith meant free from rentiers (unearned income)
| when talking about "free markets". The term was
| appropriated by the neoliberals to mean free from
| government and ignored the original meaning.
| benreesman wrote:
| I don't know why you're getting downvoted. You clearly
| read Smith and the downvoters clearly didn't. An Inquiry
| Into the Nature and Causes of The Wealth of Nations is
| like an anti-rentier pamphlet in most places.
|
| Ignore the haters, keep being right about books.
| ryanjshaw wrote:
| What makes it undemocratic?
|
| What do you propose? A speculative free-for-all like with
| crypto meme coins?
| tossandthrow wrote:
| It is, it is yet another of the constructions that
| increases inequality and makes rich people richer.
|
| Yes, an ipo is volatile, it should be! You are literally
| pricing a company.
|
| Sigh, regardless, Thisnis again one of these ways where
| free markets are being smashed by monopolistic behavior -
| you can only be a part of the game if you already have
| enough.
| Zacharias030 wrote:
| I thought IPOs don't generally pop though this one has?
|
| You can buy VTI which takes about 7% allocation in every
| IPO, but I heard there is research by some folks at
| Harvard and practiced by dimensional fund advisors' funds
| that buying IPOs ~two years later is slightly better?
| ic_fly2 wrote:
| Not all IPOs pop
| mhh__ wrote:
| This is actually a funny thing for risk mgmt because a
| trader will say "I want a bajillion shares in this IPO",
| risk notice it and say "a bajillion!?" not realising that
| ask for 10x more than you think you'll get allocated.
|
| You also sometimes need to tactically trade with worse
| brokers so they will feel nicer during an IPO.
| wat10000 wrote:
| Why don't more IPOs do an auction to set the price? Trying to
| determine the "right" price ahead of time seems like a really
| bad way to do things.
| ptero wrote:
| An auction for IPO price is much easier to manipulate and
| can lead to much volatility. Pre-allocating to the entities
| that are not expected to sell quickly or participate in
| pump-and-dumps (pension funds, etc.) is considered a better
| long term strategy for the company, as the sister comment
| says.
| aschobel wrote:
| Didn't Google solve this with their dutch auction?
| ptero wrote:
| Yes. But Google being Google it got top notch planning
| advice from world class auction experts that Goldman
| pulled in to advise them on the IPO.
|
| Most companies without such expert advice could step into
| some pitfalls. Just a guess, I am not an expert, but if
| my company were doing an IPO I would prefer it not to
| play financial games to eke out a percent of IPO price
| and instead focus on long term price stability to become
| a solid stock. My 2c.
| tekkk wrote:
| Figma's stock quadripled in price from 33 to whatever it
| is now. Not saying it's good or bad, just that those
| gains must have been nice with effort akin to staring
| spreadsheets a while and babbling in meetings.
| wat10000 wrote:
| What makes an auction easier to manipulate or more
| volatile than a stock traded on the market?
| ptero wrote:
| Likely nothing once the stock is actually trading with
| some history. But for initial placement wall-street-bets
| action could be very disruptive.
|
| The company wants to avoid sharp drops after the IPO, as
| those encourage employees to get out ASAP, which
| increases the volatility and discourages large, stable
| investors.
| vikramkr wrote:
| People like it when an IPO pops. It's a good news story and
| it makes all the banks who participated happy. If it was
| priced perfectly it'd get reported as the stock was flat,
| if it's a bit underpriced then you get headlines as the hot
| new stock that's taking off
| wat10000 wrote:
| Are headlines really worth billions of dollars?
| lucianbr wrote:
| I think Altman or Musk might think they are. At least
| they are sometimes.
| conradev wrote:
| Price discovery is impossible to do except on the market.
| You can call up everyone you know and ask them, but there
| are limits to forecasting.
|
| We all knew the Switch 2 MSRP, but we had to wait for
| launch to see the eBay Buy it Now price.
|
| In this case, the banks are Best Buy. They sold out
| quickly! Other market players are eBay sellers: the ones
| that knew what they were doing made a killing selling to
| consumers.
| vasco wrote:
| Or in this case, none?
| nl wrote:
| The point is that Figma is now another one of these suitors.
| DenverR wrote:
| Love the FTC getting to decide if you're permitted to sell your
| startup or forced to deliver more shareholder value.
| linotype wrote:
| As an investor that can't invest in private companies, I love
| it unsarcastically.
| breadwinner wrote:
| If a big company in dominant position is allowed to gobble up
| any and all upstart competitors that's bad for competition, and
| it is the FTC's job to preserve competition.
| DenverR wrote:
| How was Figma able to generate any value operating in Adobe's
| powerful monopoly?
| schmorptron wrote:
| significantly better product with no mature comparable
| adobe counterpart
| BobAliceInATree wrote:
| $20 billion sell price is no longer a "startup"
| mosura wrote:
| Indeed, in a week Meta will offer that to an ML undergrad as
| a signing bonus.
| kelnos wrote:
| I do love it. Companies don't exist solely to enrich their
| founders, they exist to provide a benefit to society. There
| needs to be a balance, of course, but if allowing a sale does
| not benefit society, then we should not allow it.
|
| > _your startup_
|
| You're under the misconception that companies "belong" to
| individuals. Companies are legal frameworks that society has
| decided upon. We could legally decide that M&A just isn't
| allowed, ever, if we wanted to. (I don't think that would be a
| good idea, but I hope you see my point.)
| DenverR wrote:
| Congratulations you've just described central planning.
|
| So "society" should be able to veto a sale, but when payroll
| is due the owners are on the hook?
| samrus wrote:
| Reductionist. Your phrasing it like the onky options are
| full central planning and libertarianism. Theyre both
| wrong. You need the free market to do what it is capable
| of, and regulate it when its isnt. The free market was
| going to let monopolies form. We have all already agreed
| thats bad. Khan's policies just updated that to the tech
| sphere
| mistercheph wrote:
| Actually, the owners not being on the hook when payroll
| comes due and the business is out of cash is exactly the
| protection that society has extended to incorporated
| businesses. But I'd be happy to horse trade unregulated m&a
| activity for owners, boardmembers and executives having
| full liability exposure, financial and criminal.
| bagacrap wrote:
| It's also not "your" startup once there are shareholders,
| including employees.
|
| If it's a one person shop, then sure it's "yours", and the
| FTC can't block you from being hired (that I'm aware).
| kccqzy wrote:
| It sounds like you are actually upset at Congress, which
| created FTC and gave it the power to decide if you can sell
| your startup. FTC is just doing the job prescribed by Congress.
| x3n0ph3n3 wrote:
| And yet she allowed Broadcom to purchase and gut VMware.
| oooyay wrote:
| My experience with mergers and acquisitions is that it's akin to
| keeping a warm body on life support. When I worked at a company
| that did a lot of M&A I was sitting around like, "Why couldn't
| you have just built that?" When I worked at a company that was
| recently acquired and went through the merger process I was like,
| "wow I see why you bozos would've never built this yourselves."
| That isn't to say there aren't companies that do them well or
| there aren't places where it makes sense in an ultra-competitive
| landscape but I'm curious - when was the last time anyone
| _really_ considered tech an ultra competitive landscape?
|
| Post-2015 other than large language models this industry has
| mostly been riding on intellectual property consolidation. That's
| basically Lina's point; nobody actually benefits from this - not
| customers, not share holders, not the American people. The over
| practice of M&A leaves a small pool of winners who are not the
| kind of people that post on or read this forum.
| delfinom wrote:
| The only ones that benefit are the executives from temporary
| boosts of revenue numbers hitting targets for their bonus
| payouts.
| msgodel wrote:
| >nobody actually benefits from this
|
| The secondary market drives the primary market.
| braiamp wrote:
| If you mean the ones transacting in derivatives, no, they
| don't. The US market isn't India where the size of the
| secondary market was bigger than the primary market. If you
| mean that financial markets drive real markets, that's also
| wrong. While yes, certain products need a infusion of cash to
| get to market, that's not the same as having a company
| acquire the possibility of a new product and just sit on it.
| unmole wrote:
| You could just look up what primary and secondary markets
| meant without speculating and chiming in with irrelevant
| takes.
| steveBK123 wrote:
| More companies going public, earlier is better for markets and
| society.
|
| Having companies stay private growing from 0 to 100B value allows
| VC bros to capture all the growth and then unload onto the public
| via IPO or selling to a larger BigTech firm.
| devmor wrote:
| If you mean specifically the case of VC companies, this is
| true. I think the opposite is the case when we're talking about
| "naturally grown" companies that didn't take on serial investor
| money.
| chii wrote:
| > then unload onto the public via IPO
|
| this implies they're unloading at a valuation that is higher
| than it is worth. If so, why do "the public" make the purchase?
| steveBK123 wrote:
| Have you met retail investors? Meme stocks. 0DTE options.
| NFTs. ICOs.
|
| It's called FOMO.
| sitkack wrote:
| Lina Khan is a genius.
| eggn00dles wrote:
| would not be surprised if shes the first fpotus
| schmorptron wrote:
| if the establishment lets that happen it would be incredible
| for the US imo. But weren't there also pushes for her to get
| fired even if Harris got elected? Of course not as strong or
| immediate as it happened with Trump, but the Lobbies weren't
| happy either way...
| lvl155 wrote:
| She's not even US born. Nice try.
| Sherveen wrote:
| Everyone in this thread who posts some variation of "wow love it
| how the government gets to decide if you get to sell your startup
| or how the market should work" should be handcuffed to their
| chair and forced to answer these 3 questions:
|
| 1. is there any role for gov't antitrust in your view of modern
| capitalism? 2. if there is a role, why is Adobe x Figma not the
| perfect example for enforcement? 3. if your answer is "Adobe
| clearly isn't a monopoly, look at the existence of Figma as
| evidence," why are you dumb?
| Spooky23 wrote:
| Keep in mind that this is a forum run by a company that is a
| funnel for new VC companies and most people are in adjacent
| places in tech,
|
| Principles don't pay the mortgage.
| saagarjha wrote:
| If your house is in Atherton, maybe.
| bravesoul2 wrote:
| And without governments there is no business as we know it,
| just a Mad Max scenario a bit like rival criminal gangs.
| mattmcknight wrote:
| 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?
| tkzed49 wrote:
| Yeah, because now it's not owned by Adobe, who are tanking
| their own stock price.
| boroboro4 wrote:
| 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.
| mattmcknight wrote:
| But how is the IPO a sign of success in that case?
| alchemyzach wrote:
| 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
| austhrow743 wrote:
| That's unrelated to the IPO.
| littlestymaar wrote:
| How? A VC-backed company must have an exit path for its
| investors at some point, and this exit is either:
|
| - sell the company to a bigger player, reinforcing their
| dominant position (often close to monopolistic in tech).
|
| - go to IPO, keeping the company independence and
| fighting power concentration.
| kgwgk wrote:
| There is a third option. (According to some LLM that will
| remain unnamed Vungle, Wrike, and Acquia are textbook
| cases of direct VC-backed startups being bought out by
| private equity without an IPO or corporate acquisition.
| Not verified.)
| roenxi wrote:
| Figma is a web app. Web apps are fundamentally a hyper-
| competitive market because literally anyone can just
| throw something up on the internet if they think there is
| a need for it. The risk here of Adobe overcharging for it
| is rather low - someone would build a cheap clone.
|
| People keep coming up with theories that companies are
| about to corner the market then over-charge, but the
| theories vastly outnumber the cases where it ever happens
| in practice. It is almost always that the biggest
| companies in the market are just more competitive (lower
| prices or higher quality) than all the others.
| 9dev wrote:
| That is not what would happen. Figma has built a huge
| moat through its brand by now, and most customers would
| continue to use it; some of them probably already have an
| Adobe subscription anyway, so Adobe would naturally try
| to make it easier or more integrated for these customers.
|
| A clone would need to start from scratch and compete
| against a huge corporation with virtually unlimited
| funds.
|
| > _It is almost always that the biggest companies in the
| market are just more competitive (lower prices or higher
| quality) than all the others._
|
| That is almost always not what is happening. The big
| players extinguish any would-be competition early by
| buying them or throwing sticks into their wheels. They
| can afford to strategically make a loss in a given area
| to underbid the competition by overcharging in others, or
| relying on synergies. There are numerous examples where
| small teams built highly qualitative alternatives to
| corpo stuff, but had to compete against the network
| effects and brand names instead.
| mattmcknight wrote:
| They were independent the whole time and it wasn't
| considered a success. I suppose IPO is an indicator they
| might stay independent longer. Now that they are in the
| public markets even Adobe can buy a few shares. I just
| don't feel like the IPO event has brought any particular
| benefits to the consumer and Khan is incorrectly looking
| at post IPO stock price bounce as some kind of financial
| indicator that it was a better deal for the company.
| alchemyzach wrote:
| You are not following the thread here. There is no actual
| logic to anything youre saying. I am respectfully
| disengaging. Good luck in your travels and may luck be on
| your side
| mattmcknight wrote:
| I am trying to explore the ways in which the IPO, in
| particular, separate from the continued operation of the
| company, is evidence that blocking M&A is good. I have
| seen nothing from you supporting Khan's position that the
| IPO is vindication for blocking M&A.
|
| Her particular claim was that it was "a great reminder
| that letting startups grow into independently successful
| businesses, rather than be bought up by existing giants,
| can generate enormous value." However, the IPO price was
| $700M less than the value the company was at three years
| ago, which, given opportunity costs and inflation, would
| not seem to be an indicator of enormous value being
| generated.
| boroboro4 wrote:
| The current market cap of Figma is around 60B if I read
| it correctly. Yes, not all of it was IPOd, but from
| purely this perspective it was hugely successful. But
| then it's also unfair to compare this market cap as is,
| because I would expect Figma as separate entity will grow
| better than Adobe as a whole. Meaning that people who'll
| hold Figma stocks right now have a chance to have better
| returns in a future.
| danielmarkbruce wrote:
| The amount of money in the pockets of the owners (no
| matter who they are) is not what antitrust is about.
| danielmarkbruce wrote:
| They are following, they just understand it better than
| you do.
| aurareturn wrote:
| 1. Figma actually lost money because their acquisition price
| was higher than their shares sold in the IPO.
|
| 2. Yes, Figma luckily IPOed in an extremely hot market
|
| Getting a bit lucky doesn't mean this was a success overall.
| The conclusion has many more years to go before it gets
| written. Either way, I don't like the over reach by Lina
| Khan.
| adastra22 wrote:
| They lost money (sort-of) because the market cap was $700M
| less at IPO. The amount of shares sold in IPO is
| irrelevant.
|
| I said sort-of because the economics of this is more
| complicated. Investors lose their preferences when they
| sell in an IPO, so this is probably better for common stock
| holders.
| Jolter wrote:
| Who is "they", who lost money?
|
| I don't think 19.3 B is their current market cap, it's
| only what was sold at the IPo. Anyway, 19.3 instead of 20
| would have been no big deal IMO
|
| Adobe certainly lost money, because they have had to
| compete against the better product, so have been able to
| charge less for their own offering. And will presumably
| continue to do so until further notice.
|
| Any employees who would have been swiftly laid off after
| the acquisition should certainly be glad for this
| outcome. They still have jobs, and if there are layoffs
| after the IPO it will be less dramatic. If they had
| equity, they probably got a much better deal in an IPO,
| especially if they sold some of it off after the "pop".
| franga2000 wrote:
| What do you mean over reach? It's the FTC's job to prevent
| consumer market consolidation. Adobe is already too big and
| they already abuse that to the detriment of consumers.
| Buying Figma would make that even worse.
|
| A company exists primarily to make things for consumers and
| the FTC ensures they do that fairly. The IPO, stock price
| and everything else is secondary.
| aurareturn wrote:
| What do you mean over reach? It's the FTC's job to
| prevent consumer market consolidation.
|
| It is over reach because it seems arbitrary.
| franga2000 wrote:
| It's not arbitrary, there are many reasons to block the
| merger and they were explained in depth when the decision
| was made.
|
| Also, the EU and UK also made it clear they were against
| the merger. In fact, if you look at most reporting, the
| EU and UK seem to be the main reason they gave up,
| presumably because they know the US FTC has no teeth,
| even with a competent chair.
| aurareturn wrote:
| Even if EU and UK wanted to block the deal, it doesn't
| make it the right thing to do. Free market.
|
| I don't have a popular opinion on HN. I don't think
| Google should be broken up because new technology has
| made Google search much less needed. I don't think Apple
| should relinquish control over its app store because it's
| Apple's platform and they should do what they want. I
| don't think Adobe should be stopped from buying Figma
| because even if Adobe buys it, maybe some rich ex-
| employees might quit and make another competitor or make
| an open source alternative. Who knows.
|
| People on HN wants the government to weaken tech
| companies but not when it's the tech company they're
| working in.
| Wilder7977 wrote:
| For someone who believes in free market, how is it
| acceptable to have consolidated monopolies? The market is
| free when there is competition. If there is no
| competition there is no freedom. Of course I know that
| for many "free market defenders" "competition is for
| losers" (was it Peter Thiel?), and ultimately nobody
| cares of the abstract value of freedom.
| aurareturn wrote:
| Monopolies are natural in highly technical industries.
| But monopolies don't last forever. New technologies wipe
| out monopolies all the time. ChatGPT is disrupting Google
| search monopoly. Solar/EV is disrupting oil. Tools like
| V0 is disrupting Figma. ChatGPT itself is disrupting iOS
| and Android. The list goes on and on and on.
| danso wrote:
| "Solar/EV is disrupting oil" -- where exactly has
| solar/EVs disrupted oil without the benefit of (wise,
| IMO) government intervention and subsidies?
| Wilder7977 wrote:
| You are mixing industry and company. LLMs are overtaking
| Google search (I.e., internet search which is a
| monopoly), but it doesn't have to be chatGPT (I.e.
| openAI).
|
| In any case, it's irrelevant they are not eternal
| (especially if we go from monopoly to monopoly), the
| point stands: if you have a monopoly you don't have
| freedom and free market doesn't work at all.
| franga2000 wrote:
| My point is that is is the right thing to do and multiple
| countries' regulators agree. Monopolies have proven
| themselves to be bad and consolidation is how they are
| created. The "free market" (as if there is such a thing)
| does not take care of this, because it's not profitable
| to compete with such a powerful incumbent. Any attempt to
| compete would require insane capex and have a higher
| price tag for consumers, who would likely have to pay it
| not instead of but alongside the current incumbent's
| price, which very few would accept. If instead, you
| intervene and block the merger, the company can (and is
| incentivised to) grow and branch out, competing with the
| one that tried to acquire it.
|
| Obviously this is a YC forum and many people have a
| startup bias, but I'm nowhere near that scene. Many
| startups do even worse things than some of the big guys,
| because they aspire to become them. The "burn investor
| money to get market share at a loss, kill all
| competition, become a monopoly, then enshittify and make
| infinite money" strategy wouldn't be nearly as effective
| if we had proper antitrust enforcement.
| shortrounddev2 wrote:
| I, too, think we should just let rich people do whatever
| they want!
| const_cast wrote:
| > Free market
|
| Free market requires maintenance. Laissez-faire is a lie
| and always has been.
|
| If you let all the companies consolidate into mega
| monopolies who have a stranglehold on the market, where
| is the free market?
| svcphr wrote:
| Its market cap is about $58b right now. Tripled in three years!
| mattmcknight wrote:
| But the company only sold the shares at $19.3B.
| cogman10 wrote:
| Right, which gave them 19B (ish) to play with and they are
| an independent competitor to Adobe.
|
| Mergers trigger layoffs
| seattle_spring wrote:
| Figma raised $1.2B in their IPO. Total shares listed !=
| money raised, not by a long shot. Most shares are just to
| give liquidity to existing shareholders of the company.
| dv_dt wrote:
| If they have to issue shares the higher valuation is
| significant
| snowwrestler wrote:
| But they also only sold a very small number of shares at
| that valuation, vs all of them at $20B to Adobe.
| hackernewds wrote:
| this is the answer
| singhrac wrote:
| The employees will have to wait 180 days (at least that's
| the standard) before selling any shares, so they usually
| feel the effects of a "bounce".
| asah wrote:
| We'll see but post-IPO their valuation is $58b, so it's not
| clearly wrong
|
| But also as you said this is 3 years later, which is a long
| time in the tech business and all sorts of things have changed,
| positive and negative... so she's not clearly right either...
| cogman10 wrote:
| 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.
| missedthecue wrote:
| Yep, and because HP did that, we now have no mobile
| smartphones. If only the government would have prevented
| that!!
|
| Caplan said it best. The market is great at doing good things
| that sound bad. The government is great at doing bad things
| that sound good.
| zaptheimpaler wrote:
| 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.
| ajkjk wrote:
| Clearly yes
| mandevil wrote:
| IPO valuation is pretty much always set to undervalue so it
| gets a good pop(1). The market cap after 90 days of trading
| (generally speaking when insiders lock-up provisions expire and
| there is no longer a limit on the number of shares that can be
| sold) is a much better estimate of the actual value of the
| company. We don't have that yet, but right now the stock is ~3x
| the valuation that Adobe was going to buy at. Every equity
| owner is currently booking this as a win. We'll see what the
| price is when the lock-out provisions end, but right now
| definitely the shareholders are glad that they didn't merge.
|
| I know that because if the metric you cite was something that
| the investors and managers cared about, they could have done
| other things to boost it (see footnote 1). They didn't, ergo
| they don't consider that metric to be a useful gauge of the
| company value. It sure looks like you tried to find the worst
| performing metric to claim that there was a loss, when so far
| this has been a major win for the shareholders(2).
|
| 1: If you don't want this and want to IPO at the highest
| valuation, you do a direct listing like Spotify did, or a SPAC
| reverse merger like Trump Media did. But there are reasons that
| the vast majority of companies choose to do a traditional IPO.
| For most companies, this is a one-time transaction that will
| make the managers very very rich, and they want to get the best
| guidance on navigating it- and are willing to pay handsomely
| for that guidance, since this is the only time in their lives
| they will be CEO for a major company that is starting to list.
| So they follow the IPO/greenshoes/pop route.
|
| 2: The most important nuance on that statement is that it took
| them a year and a half to extract that extra value by doing an
| IPO, and now they are exposed to market risk. We will have to
| see what the market conditions are like in another few months
| when the lock-ups expire.
| landl0rd wrote:
| I'm not especially in favor of all of Khan's actions but this
| was an accretive acquisition prospect for Adobe in a way that
| makes it worth more to them vs as a standalone company. Think
| how Urchin Analytics was worth a lot to Google but less by
| itself.
|
| Also, Adobe was _massively_ overpaying, arguably even if you
| consider that. Even if you assume it was due to seeing Figma as
| a huge competitive threat the stock nosedived due to the
| acquisition price.
| andy_ppp wrote:
| Why would Figma have sold to Adobe if they were not paying a
| premium, assuming they'd grow?
|
| I can understand you looking at the headline valuation but as
| an independent company traded with lots of potential to grow
| with AI tools their stock will probably double... a quick
| Google appears to suggest a 250% uplift from the IPO price so
| the company would potentially have added $58bn (the figure I've
| seen quoted) to Adobe's bottom line.
|
| Lina Khan was right at least on this merger!
| isodev wrote:
| Yes, otherwise we get no "free market" and everyone looses a
| good graphics tool as an option.
| ddbb33 wrote:
| Yes, more competition is a success.
| brokencode wrote:
| You do not understand how IPOs work. They only sold a small
| number of shares (about $1.2B) in the IPO. That's why it's
| called an "initial offering" of shares.
|
| Investors can feel free to hold onto their remaining shares and
| sell whenever they want, outside of a window following the IPO
| where they can't.
| jdkee wrote:
| Why should a regulator interfere with the free market in this
| example?
| saagarjha wrote:
| That's, like, their job.
| codingbot3000 wrote:
| The idea is to interfere in the free market of buying software
| companies in order to maintain the free market of software.
|
| Adobe buying Figma at that time looked likely to reduce
| competition in the "creative" software market.
| evolve2k wrote:
| What a stupid comment at the end of the article. The vindication
| is of having the company exist in the market in such a way as to
| encourage competition.
| bagacrap wrote:
| "Figma is a massive success [...] because of the company's
| innovative growth"
|
| Given that this sell side analyst defines success as growth,
| this seems rather like a tautology.
| siliconc0w wrote:
| It's a fair point but it's easy to say it after the fact- there
| was no guarantee of a better outcome.
| root_axis wrote:
| She was instrumental in blocking the acquisition by Adobe,
| obviously her claim at that time was that it would lead to a
| better outcome.
| zombiwoof wrote:
| People don't remember the hellscape of computing when Microsoft
| was an unchecked monopoly
| xyst wrote:
| "Embrace, extend, and extinguish" days will never be forgotten.
| One of the primary reasons I have always had disdain for MS.
| SilverElfin wrote:
| Aren't they basically the same now, unchecked in power? They're
| able to muscle into anything using their money and incumbent
| strength. They can use existing products to sell new ones. They
| can copy products and give them away. They can wage legal wars.
|
| Personally, I think it's unacceptable to have any business
| worth 4T as a single company. It's not good for competition and
| for customers in the long term. But today's anti competitive
| tactics are different from the simpler monopolistic tactics of
| the past. We need all new regulations to deal with it.
| sien wrote:
| You mean when Google, Nvidia, Amazon and Netflix were formed ?
| xxs wrote:
| That was after. Unless you count netflix mail service.
| dabedee wrote:
| I think the Figma IPO proves Khan was right. $60B market cap
| today vs the $20B Adobe offered in 2023. There was some criticism
| about regulatory overreach when the deal got blocked. Now Figma
| employees are rich, the design tools market stays competitive,
| and we have another major independent tech company instead of
| just another Adobe product line. This is exactly why we need
| regulators willing to tell Big Tech "no" sometimes. Competition
| creates more value than consolidation.
| ichik wrote:
| > design tools market stays competitive
|
| Adobe killed their Figma competitor (XD), so the reality of the
| UI design tools niche in the design tools market is that Figma
| actually has a near monopoly. Sketch still chugs along, but its
| market share is negligible. Penpot is a neat idealistic
| community effort that is lightyears behind.
|
| This is one of the reasons why Figma continues to tighten the
| screws on their userbase, who doesn't like it one bit, but
| continues to pay.
|
| Now, this is all not to say, that it would've been any better
| with Adobe's involvement, more like lamenting the fact that
| Figma lived long enough to become a villain.
| madeofpalk wrote:
| Figma has a near monopoly because it built the better
| product. This is the preferred outcome compared to Adobe
| broadening their monopoly not by building a better product,
| but just by acquiring/squashing their competition.
|
| Monopolies aren't illegal. Preventing competition is the
| thing we want to stop. As far as I can see, Figma doesn't do
| anything to give themselves an unfair advantage or prevent
| other players from entering the market.
| MrGilbert wrote:
| Figma had 8 funding rounds in 10 years, according to
| crunchbase. That is an advantage compared to other players
| on the market that do not receive VC. If it's fair or not,
| that's up to everyones own standards.
| skrebbel wrote:
| You do not "receive" VC, you sell shares (and control).
| You write as if it's some sort of grant that Figma
| uniquely got access to.
| MrGilbert wrote:
| I think the more common term is to "raise money". But at
| the end, you receive money that you should spend. With
| strings attached, of course. That's the nature of VC.
| skrebbel wrote:
| Yes but that's pretty common and in no way an unfair
| advantage.
| theptip wrote:
| It's fair, because they earned it by building the best
| offering on the market.
|
| Fairness doesn't mean everyone gets funded regardless of
| their quality.
| ashwindharne wrote:
| Should the other players not have also raised VC money if
| it was such a differentiating advantage? Perhaps they
| should have sold even more equity than Figma did and
| raised more money if that would have been the difference
| maker.
| shortrounddev2 wrote:
| Adobe is in maintenance mode. They aren't willing to compete
| with figma because they have basically never had to compete
| with anyone since the 90s. They forgot how
| dkarl wrote:
| Adobe would have killed one product regardless. If they had
| been allowed to acquire Figma, they might have killed the
| better one.
| yard2010 wrote:
| PSA that no regulator simply means the sharkest shark
| regulates. There is no such thing as no regulator. People will
| regulate. The question is who and how
| bko wrote:
| What does this mean? If there is no regulator, someone else
| will use force to prevent voluntary mutually beneficial deals
| from taking place?
| sprinkly-dust wrote:
| That is one of the possible outcomes right? Producers have
| an incentive to collude and not compete with one another.
| They could create a consortium to fix prices, and use
| tactics such as acquisitions or _dissuasion_ to prevent
| new, more efficient competitors from undercutting their
| prices, thus distorting a free market equilibrium.
|
| The consortium creates an oligopoly which prevents mutually
| beneficial deals that would have otherwise taken place in a
| regulated competitive free market between consumers and
| producers.
| passwordoops wrote:
| I think that's what the comment meant. Take it
| metaphorically
| lucianbr wrote:
| If there is no regulator, the company with the most money
| will use its money to prevent any deals that are
| inconvenient for it from taking place. Often those would be
| beneficial to the other parties or to the consumers.
|
| Maybe it's not a great choice of words to say here "the
| large company regulates the space" but it's definitely a
| problem worth pointing out.
| benreesman wrote:
| It means that markets organize somehow. Even black markets
| in prison have rules (and for all I know, sensible ones
| under the circumstances). The drug trade has rules and
| norms.
|
| Cartels form and collude, the JP Morgans or Goulds of the
| world see excessive competition next to their neat steel or
| railroad trusts and decide to organize it. And sometimes
| this can even be an improvement (those old telephone poles
| with like 90 separate junctions just got too tall to be
| safe!)
|
| But on average, the public would like (or should want) a
| say in how markets are organized, because it is both
| possible and lucrative to induce market failure. Big Tech
| is especially good at this (its arguably far more their
| speciality than technology is).
|
| Markets are inevitable (try to stop them forming if you
| don't believe me), but _market failures_ are generally not
| inevitable, they are generally the result of poorly
| refereed markets.
| roenxi wrote:
| > Big Tech is especially good at this (its arguably far
| more their speciality than technology is).
|
| Well, yes. But that does seem to gloss over the important
| part which is how they do it - hiring lobbyists and
| influencing the official regulators. If the frame is that
| someone is going to be the most powerful force in the
| market then sure, but the government setting it to be a
| particular body by fiat just creates a ripe target for
| corruption.
|
| The history of the tech industry has been one of where if
| left to their own devices coders would create a thriving
| and tolerant software ecosystem and the main thing
| stopping them has been IP law. And a secondary thing
| stopping them has been government pressure (there has
| been a bit of a spasm recently because of the
| aftereffects of, effectively, systems set up to support
| things like Operation Choke Point, for example).
|
| Assuming some semblance of the rule of law, Google &
| friends ultimately can't stop someone competing with them
| unless the government is active in the space the space
| too. More formal regulation is probably just going to
| cement their position further.
| benreesman wrote:
| Time and again people make the utterly unsubstantiated
| claim that attack dog regulators like Lina Khan are
| actually good for big business and bad for the small guy.
|
| Year after year, big business lobbies, bribes, cajoles,
| blackmails, whatever it takes to get rid of attack dog
| regulators like Lina Khan.
|
| I'm sorry friend, history does not say what you think it
| does. History says that good outcomes come from either
| brutally regulated monopolies (ATT / Western / the Labs),
| public/private partnerships (DoD funding the Internet,
| basically every major innovation we coast on today), and
| busting the fucking chops of mega-trusts (JP Morgan,
| Gould, steel, railroads, telegraph, it goes on and on).
|
| Why does big business hate aggressive regulation if it's
| "actually good for them"?
|
| They like a Goldilocks regulation, a little friction to
| new entrants, a lot of discretion in the hands of pliant
| former industry people.
|
| They _hate_ Lina Khan.
| deadpannini wrote:
| If they hate Lina Khan, it's because she's liable to make
| demands on them without knowing anything about their
| business. In the worst case, her office turns outright
| extortionist, as the current administration is bent on
| demonstrating.
|
| None of that conflicts with the observation that large,
| well-financed, entrenched players better at navigating
| regulatory obstacles than small upstarts.
| benreesman wrote:
| False, wrong, mistaken, and other balderdash.
|
| They don't have anything against regulators and they
| certainly don't have anything against dumb regulators.
|
| They've got a little red laser dot on the forehead of
| _regulators who don 't want a payday after a term of
| "public service"_.
|
| "Because we poor public servants are always looking for
| some fat, private sectors payoff down the road. But I'm
| not looking, and by the time they can pull the strings to
| force me out, they'll be ruined."
|
| - Chrisjen Avasarala
|
| https://youtu.be/yBFJGz5P_G8
| wredcoll wrote:
| My definition of this (which apparently I'm now trying to
| popularize) is "power can never be destroyed, only
| moved".
|
| If we destroy an entity that _has_ power, the power goes
| someplace else and in the case of (democratic) government
| entities, it rarely ends up someplace better for us
| regular folks.
| malfist wrote:
| I'm not sure what you're saying. Are you arguing that
| breaking up monopolies takes power away from consumers?
| benreesman wrote:
| I think GP is saying that nature abhors a vacuum in human
| affairs as well as in physics: the question isn't whether
| or not there's going to be a government or a currency or
| a regulatory climate.
|
| The question is whether those things are going to be
| determined at a polling place by voters or in a smoke-
| filled room by gangsters.
| wredcoll wrote:
| I would have gone with corporation instead of gangster,
| but yes, exactly.
|
| People so often rail against a government telling them
| they can't do something but so rarely justify they would
| be able to do it if the government was destroyed.
| benreesman wrote:
| Who said I had anything against gangsters? ;)
|
| But lets call it what it is: when a bunch of made men see
| a power vacuum and set up an informal clique with its own
| rules and loyalty tests while protesting "just a merchant
| nothing to see here"?
|
| Thats like, the entry for gangster on the Wiki for the
| Sopranos.
| bko wrote:
| That may all be true but I don't see how it relates.
| Adobe can't prevent figma from going public if it refuses
| their offer. It's an open market. Nothing stops new
| competitors from joining.
|
| Only regulators have absolute power in this regard. I'd
| prefer decentralized power
| benreesman wrote:
| Preferring decentralized power is like preferring
| decreasing entropy, who wouldn't want that but it's
| almost never going to happen, and even local, temporary
| instances of such are miracles of nature meriting
| arbitrary study.
|
| It's concerning that you don't see this, but makes no
| difference to how the world works.
| const_cast wrote:
| Yes. For example, Apple has complete control over their App
| Store. It's essentially a small economy in which they are
| the government, and it's a market they regulate with an
| iron fist. Because OUR regulators won't.
|
| But they're dictators. There's no democracy, there's no
| voting, and Apple does whatever it feels is best for them.
| Just like a dictator would run their country.
|
| There's plenty of mutually beneficial arrangements that
| Apple unilaterally struck down because they want to
| maintain their stranglehold on the market.
| ferfumarma wrote:
| I cannot understanding your argument at all.
| rexpop wrote:
| If you eliminate formal regulators (rules, laws,
| authoritative bodies), you haven't eliminated regulation or
| governance. Instead, informal forms of power take over--
| those who are most forceful, persuasive, or socially
| connected regulate what happens. This is the "tyranny of
| structurelessness": when no open, accountable structures
| exist, structure remains--it just becomes invisible,
| unaccountable, and often dominated by the "sharkest shark."
|
| So, "no regulator" doesn't mean freedom from regulation; it
| means the emergence of undemocratic, unchecked power by
| whoever can grab and wield it.
| benreesman wrote:
| I find people tend to get it when you raise cases of
| market activity outside the law: everyone knows the mob
| buys and sells things but there are still rules.
| benreesman wrote:
| It absolutely proves that she was right. If you care about
| market cap? She was right. If you care about employee comp? She
| was right. If you care about consumer choice, she was right.
| Number of listings, new potential acquirers for your startup,
| more diverse office geography, right right right right.
|
| The idea that there's a significant lobby on fucking Hacker
| News unhappy that a startup IPO'd for a zillion bucks and made
| everyone rich is twilight zone shit. It makes no sense
| according to the stated values in the fucking masthead.
| holmesworcester wrote:
| One way to settle the question of whether Khan is right would
| be for the government to simply make competing offers in
| these situations, buy the companies, and shepherd them to
| IPO, or a buyer with fewer antitrust issues if that's not
| possible.
|
| If the government is net ahead after a decade or so, then
| we'd know.
|
| This approach to antitrust wouldn't work in cases like the
| Apple case, where the power is worth it to the company only
| because they can misuse it, but it would be a very fair and
| accounting-transparent remedy for the "startup gets bought by
| competitor" case.
| theptip wrote:
| This is a terrible idea. The government should not be in
| the business of buying large pre-IPO companies.
|
| There is no need to bikeshed a new solution here. Antitrust
| law solves this just fine, as exemplified by this case.
| benreesman wrote:
| We've got an awful lot of history on the periods in which
| serious regulators without perverse incentives attached to
| revolving door industry jobs competently and diligently
| refereed markets, and when big business has been successful
| in achieving what I downthread called "Goldilocks"
| regulation: just enough friction to new entrants, plenty of
| pliant former and future employees doing regulation in the
| interests of the established players.
|
| We've got a lot of history on what happens when technology
| is acknowledged as a natural monopoly and guided through
| it's development, evolution, and dissemination through
| society for the global welfare: that's the entire 20th
| century friend: the transistor, the Internet, the laser,
| fucking Velcro.
|
| We're living through a time when that treasure trove of
| public wealth (paid for by taxpayers) is getting captured
| up by a caricature of gilded age kleptocracy at the front
| row of the fucking Inaugeration.
|
| We know what the outcomes are. I don't know why people who
| hang out on Hacker News are fighting the _data_ on this
| tooth and nail. Maybe it 's because Trump threw her out,
| maybe it's because they own a bunch of NVIDIA stock and
| like the status quo, I don't know.
|
| The outcomes are not in fucking dispute in this case or the
| macro situation.
| api wrote:
| Terrible terrible idea with incredible potential for
| corruption and theft of public funds.
| api wrote:
| There's a lot of people I've talked to who didn't like Lina
| Khan not because of the Figma thing but because they thought
| she was having a chilling effect on acquisitions broadly.
|
| The vast majority of startups will never IPO. Acquisition is
| the only viable exit. That's because the bar for IPO has
| risen so high that only massive already incumbent unicorns
| can reach it. IPO isn't a way to raise capital to compete.
| It's a victory lap if you've won already.
|
| Don't know if this is actually true, that she was having this
| chilling effect. I am relaying a sentiment I've encountered.
|
| Of course the other reason is tech-right echo chamber brain
| rot. People need to get off Xhitter. (Not a fan of doomer
| left anti tech brain rot either. There's more than one kind
| of brain rot around.)
| benreesman wrote:
| Yeah, I have heard that sentiment too. I've never heard so
| much as a second-hand anecdote that someone was on the
| track of an acquisition but got the vibe their 50 million
| dollar acquihire plus was going to just be too much trouble
| under an activist chairwoman though.
|
| It seems to me that the same weaponization of binary tribal
| thinking in red/blue social stuff has a corollary in
| "entrepeneur / commie" oversimplification with about as
| much nuance.
|
| Smart people get emotionally manipulated on every other
| kind of politics at the behest of the new oligarchs, why
| not this one?
| api wrote:
| I agree except the part about the new oligarchs doing the
| manipulating. I think they are manipulating themselves,
| sucked into these brain rot machines as much as anyone.
|
| I heard a Thiel interview recently where he ranted about
| Greta Thunberg and the antichrist and used a bunch of
| very online Xhitter bubble terms like referring to low
| efficacy as "low-T" and I was like this guy needs to
| touch grass. It didn't even make a lot of sense.
| benreesman wrote:
| That's funny in a dark way, especially it being Thiel
| given that this entire movement/era traces a clear
| intellectual and emotional lineage to his activism all
| the way back at least as far as his writing in the
| student libertarian rag at Stanford in like 94 (and
| apparently a childhood fixation with Quenta Silmarillien
| exceeding even my own).
|
| Trapped in his own Intellectual Dark Web one might say.
|
| Yeah, Greta Thurnburg is making the frogs "low-T". What a
| bunch of fucking losers.
| malfist wrote:
| It's never made sense for me (as a gay man) how a gay man
| could get sucked into the fringe alt right manosphere.
| That whole ecosystem is antithetical to you
| benreesman wrote:
| I mean, these people aren't well my guy. It's not a huge
| stretch to imagine a bunch of repressed self-loathing
| around one's identity being at or near the core of it.
|
| Thiel grew up in the 90s. Whatever one deems the
| tolerance situation today, it was worse then.
| joe5150 wrote:
| More like the 80s but true. Also maybe worth remembering
| that Thiel was outed by Gawker. He didn't come out as gay
| of his own volition and perhaps never would have.
| assword wrote:
| I'm still waiting on him to pull a Milo Yiannopoulos and
| no longer be gay. His flirting with "libertarianism"
| already gives him a solid track record.
| terminalshort wrote:
| It makes perfect sense if you think about it from Thiel's
| perspective. Other than legal technicalities like
| marriage, the consequences of being gay are mainly
| determined by societal attitudes and not electoral
| politics. No legal changes that the Republicans would
| make do anything to stop a powerful billionaire from
| being openly gay. So it makes perfect sense that he would
| favor his business interests when he takes sides in
| politics.
| scarface_74 wrote:
| It just happened with Windsurf and Google.
| benreesman wrote:
| Windsurf getting "bought" such that the employees got
| nothing is a great recent example of why you want Lina
| Khan seeing to it that a healthy and well-regulated M&A
| market is in effect. That's precisely the kind of lowbrow
| shit you can thank her bought and paid for successors for
| bringing you the next decade's worth of.
| JustExAWS wrote:
| So now you think the government should stop companies
| from hiring people?
|
| Isn't that the sane thing we (rightfully) criticized
| Apple, Google, Adobe and a few other companies for doing
| in the Jobs era when they had an anti poaching agreement?
| terminalshort wrote:
| No, it really isn't. It's not remotely the FTCs job to
| regulate that type of thing, and I really don't think you
| would want it to be. Would you rather have a system where
| competing companies have to get government approval
| before extending offers to you? You know who would love
| that system? Google.
| mulmen wrote:
| > The vast majority of startups will never IPO. Acquisition
| is the only viable exit.
|
| Or you could run the business profitably and not exit at
| all.
| edoceo wrote:
| Hard to raise money with that plan. The VC world wants
| the 10x. Difference between SME and Startup.
| respondo2134 wrote:
| IPOs are a really tough path, and can significantly alter the
| business. I'd hesitate to hold up the big one for this year
| as vindication for her entire approach. The vast majority of
| growth tech companies are not going to go public, but need to
| release value for investors and employees, and PE or
| acquisition is the only path open to them. If you've ever had
| experience with PE you might not want to deal with that, and
| getting bought is all that's left if you owe people a big
| return soon.
| benreesman wrote:
| Sure, and a counter-argument of the form "acquisitions from
| such valuation to such valuation were down such percent, we
| interviewed the following founders and these Corp Dev
| lawyers spoke on the condition of anonymity..." would be an
| interesting one. But AFAICT at everything but Goliath
| scale, M&A was actually up over the period.
|
| So as usual here we are with the epic showdown of Data and
| Vibes...and in an obvious landslide Vibes takes it home.
| MattDamonSpace wrote:
| It wasn't the outcome, it was the bad reasoning and the
| overall desire for interference
|
| Does it _really_ matter if Figma was bought vs IPO? No of
| course not. Khan just needs a poster child for her overall
| intervention philosophy.
|
| Pointing at Figma as a success for her overall world view is
| like the religious who say "oh god saved me from that flood"
| while ignoring the hundreds who did die. The Almighty wanted
| them to die? Or...?
|
| If you're gonna claim the successes you have to claim the
| failures
| benreesman wrote:
| What failures? Tech has been Godzilla stomping every
| conceivable obstacle to total world domination. Its like
| half the fucking stock market.
|
| Someone caught a shooting star in the palm of their hand
| one time and this happened.
|
| What are you talking about?
| nicoburns wrote:
| > Does it really matter if Figma was bought vs IPO? No of
| course not.
|
| I think it matters. Look what happened when Adobe acquired
| Macromedia in 2005. The innovative product (Fireworks) that
| brought many (but not all) many of the innovations that
| would later come in Sketch and then Figma was left to
| slowly die because it competed with their flagship product
| (Photoshop). That delayed innovation in that market segment
| by around a decade.
| pests wrote:
| Fireworks was great when I was a young teen and first
| learning the difference vector graphics could make.
|
| Let's not forget our beloved Flash, who knows how
| Macromedia would have handled it and maybe it wouldn't
| have had to be removed from browsers under Adobe's watch
| due to security issues.
|
| I almost never see anyone mention Macromedia in relation
| to Flash these days, almost as if history has rewritten
| it to an Adobe thing.
| mschuster91 wrote:
| > who knows how Macromedia would have handled it and
| maybe it wouldn't have had to be removed from browsers
| under Adobe's watch due to security issues.
|
| Flash _always_ was a dumpsterfire, and so were virtually
| all browser plugins using native code. There 's a reason
| NPAPI was deprecated eventually.
|
| The exception of course is ActiveX. There was no way to
| _ever_ make that shitshow even reasonably safe, simply
| given how its execution model was.
| benreesman wrote:
| It was kind of fun watching adult men say the word
| "ActiveX" out loud and in earnest though. DCOM with
| Apartment Threading just didn't have that same "Power
| Rangers Bad Guy" energy.
| Jolter wrote:
| What failures, exactly?
| fmbb wrote:
| If there are no failures how can you claim them?
| tsimionescu wrote:
| It doesn't matter per se if Figma is bought instead of an
| IPO. It does matter that Adobe was about to pay about one
| third the fair market price of Figma, and she successfully
| stopped this market manipulation.
| dabedee wrote:
| I think you're hitting the real divide here. Some people are
| so ideologically opposed to any regulatory intervention that
| they can't admit when it works, even when the evidence is
| staring them in the face. Also notable [0]: "[...] in any
| given year, we see up to 3,000 merger filings that get
| reported to us. Around 2% of those actually get a second look
| by the government, so you have 98% of all deals that, for the
| most part, are going through. Around 2% of those actually get
| a second look by the government, so you have 98% of all deals
| that, for the most part, are going through." The FTC wasn't
| blocking everything, just the deals that would entrench
| monopolies.
|
| [0] https://techcrunch.com/2024/06/15/ftc-chair-lina-khan-on-
| sta...
| benreesman wrote:
| Yeah I think you're right. It's a sad commentary on the
| times when a group of people so far above average in caring
| about outcomes and data just go completely lizard brain in
| a way that comes out of their own paychecks.
| scarface_74 wrote:
| So now the monopolies are just hiring away all of the
| people they want from the startup and leaving the company
| as a shell of its former self - leaving both investors and
| the employees left behind high and dry.
| jbothma wrote:
| Any evidence of that?
| benreesman wrote:
| Probably talking about character.ai and a few similar
| cases. It's not the trend GP is making it out to be.
| JustExAWS wrote:
| People in government think otherwise
|
| https://www.politico.com/news/2024/07/13/big-techs-
| poaching-...
| JustExAWS wrote:
| Google and Windsurf
|
| https://techcrunch.com/2025/08/01/more-details-emerge-on-
| how...
|
| Amazon
|
| https://www.politico.com/news/2024/07/13/big-techs-
| poaching-...
|
| Microsoft and Inflection
|
| https://finance.yahoo.com/news/big-ai-reverse-acqui-
| hire-150...
|
| Microsoft almost pulled it off with OpenAI during the
| Altman fiasco.
| benreesman wrote:
| Listen, I think its bullshit what happened to the
| Windsurf people. And I'm happy that the Figma people
| didnt get crammed down with some scam ass preference
| assplay.
|
| But blaming Lina Khan for the crime orgy that started the
| minute she was forced out is silly.
|
| Go stick that blade where it belongs. I'll help any way I
| can.
|
| https://youtu.be/pDaELkYEC_g
| trhway wrote:
| >Google and Windsurf
| >https://techcrunch.com/2025/08/01/more-details-emerge-
| on-how...
|
| that looks strange to me to say the least - a company A's
| leadership leases completely away the company A's IP to a
| company B while at the same time getting fat employment
| offers from the same company B. If it were in Russia i'd
| say it is a bribe/kickback while in US it looks
| suspiciously like a huge conflict of interests. How no
| regulatory agency looked into that...
| benreesman wrote:
| A very self-regulating little arbitrage, because the
| investors and the monopolies are in the process of
| merging themselves. This is the part most people seem
| unwilling to accept: these rich guys are dumb man. When
| you organize your whole society around rich kids having
| advantages it only takes a couple of decades before
| they're all just bad at their jobs.
|
| This mafia capitalism isn't even good for the
| capitalists! They just can't get it together on a
| sustainable system!
| ethbr1 wrote:
| The under appreciated drag is which is statistically more
| likely to be talented?
|
| 1. Someone from a wealthy / connected family
|
| 2. Someone who scrambled to the top of 100,000 other
| people
|
| Folks can argue good schools, etc. all they want, but
| proven ability and drive to outcompete others should be a
| heavy counter argument against nepotism of all sorts.
| triceratops wrote:
| If it keeps up, it's only a matter of time before
| startups stop being able to hire top talent.
| JustExAWS wrote:
| Most startup hiring has always been a scam for the
| idealistic where people would be better off statistically
| by just working for a publicly traded tech company that
| put RSUs in your brokerage account that you could
| immediately sell (and should) diversify once you are
| vested.
|
| In my latter years of my career, I've been offered "great
| opportunities" at a startup that paid less in cash for
| more responsibilities than I was making as a mid level
| employee (cash + RSUs) at BigTech when I was there.
|
| Of course they promised "equity" that was illiquid and
| probably would have been worthless.
| assword wrote:
| > So now the monopolies are just hiring away all of the
| people they want from the startup and leaving the company
| as a shell of its former self
|
| I thought they were dumping everyone at the moment.
| Unless you're an AI researcher.
| scarface_74 wrote:
| And notice who gets hired...
|
| That means if there are 10 developer - 7 working on the
| product and 3 working on the fundamental AI problem,
| those 7 aren't going to be left (the company didn't want
| the product anyway) and the 3 researchers are going to be
| hired.
|
| Something similar happened with Google and Windsurf. So
| who benefited from the anti acquisition mood of the
| previous FTC? Not most of the employees who could have
| made more just working for a public company in the first
| place and not even the investors.
|
| Google accomplished the same thing with less red tape and
| didn't have to hire the people they didn't want.
| AnthonyMouse wrote:
| > So now the monopolies are just hiring away all of the
| people they want from the startup and leaving the company
| as a shell of its former self - leaving both investors
| and the employees left behind high and dry.
|
| If this was a viable strategy then they would have just
| done it regardless, right?
|
| Meanwhile the solution to that is to break up the
| monopolies to begin with. You don't have trillion dollar
| companies monopolizing the labor pool if you don't have
| trillion dollar companies.
| AnthonyMouse wrote:
| > Some people are so ideologically opposed to any
| regulatory intervention that they can't admit when it
| works, even when the evidence is staring them in the face.
|
| We have a problem where regulators are bad at their jobs
| _most_ of the time, and then people develop the heuristic
| that _all_ regulation is bad.
|
| You need some rules to price major externalities. Not
| _minor_ externalities, because regulatory overhead and
| enforcement are themselves externalities and it doesn 't do
| any good to burn $1 in overhead to prevent $0.90 in some
| other cost. But you want a ban on leaded gasoline.
|
| And you need antitrust rules, because "the market is more
| efficient" is fundamentally predicated on _competitive_
| markets. Real competition is the _sine qua non_ of that
| actually working. Most government inefficiency is _because_
| the government is a monopoly, and private monopolies are
| just as bad.
|
| The problem is politics breaks everyone's brains. One party
| says "regulation good" and the other side says "regulation
| bad" before either of them considers what the regulation
| actually _does_. And then you have one party promoting
| illiterate nonsense like price controls or justifying
| busybodies who want to micromanage things they don 't even
| understand or trusting the government with mass
| surveillance data just because they're not a private
| company, and on the other side you have people with no
| objections to tying arrangements or companies with double-
| digit market share buying even more of their competitors.
|
| "Everything should be made as simple as possible but no
| simpler." That last bit turns out to be kind of important.
| benreesman wrote:
| Your whole comment is good but I want to signal boost the
| most important point you made.
|
| Private cartels are just bad governments with _even less
| accountability or incentive to be efficient_. Take the
| worst DMV office in the world and put it in charge of
| something way more important than license plates.
| akudha wrote:
| _Some people are so ideologically opposed to any regulatory
| intervention_
|
| These are people who are ideologically opposed to _any_
| regulatory intervention? How can such an extreme position
| even begin to make sense? This is like letting boxers (or
| MMA fighters) fight in the ring without a referee, isn 't
| it? As it is, there are lax rules that are getting even
| more relaxed by the day and even those lax rules aren't
| enforced consistently, for big businesses and those with
| money.
| DannyBee wrote:
| Having criticized a lot of her tenure (and still do!), Lina's
| problem was never whether she was right or not.
|
| It's that she was incredibly ineffective.
|
| Of course she was right. That's what made her practical
| ineffectiveness so problematic.
|
| She was often 100% right on what should be done but could
| only achieve 0-10% of it.
|
| I'd rather have someone who is 70% right on what should be
| done, but can achieve almost all of it, as some previous FTC
| chairs were.
| benreesman wrote:
| Even this one victory (and it was more than one) is one
| more than the fucking nothing we're getting on pushback
| from the SEC to the FDA to the FCC and back again now: this
| is #CrimeSeason baby (or so its called on Twitter),
| oligarchs in the front row and all. The last 3
| administrations have been soft on FAANG and its going
| really badly.
|
| The argument that she had the correct agenda, won a few,
| lost most to a captured judiciary (correct me if I'm mis-
| characterizing your position) is probably the stupidest
| thing I've seen on one of the dumbest threads in recent
| memory.
|
| Can you clarify where I've lost the plot with your argument
| and restore some of my sorely tested faith in humanity?
| phillipcarter wrote:
| Why do you think she was ineffective?
| DonHopkins wrote:
| But what if you care about Adobe? Booooo Hooooo!!! ;( /s
| aetherson wrote:
| Suppose that you have an opportunity to play a game. The game
| is you roll a fair normal six sided die. If it comes up a 6,
| you get $60B. If it comes up a 5 or 4 you get $30B. If it
| comes up 3 or less, you get $0.
|
| This is clearly a valuable game! It is worth in expectation
| $20B. But it also has a 50% chance of being worthless to you.
|
| Someone offers to buy it from you for $20B. You agree, giving
| up some upside for some downside protection.
|
| But then someone else says that's not allowed. So you play
| the game and you roll a six and get $60B.
|
| Does that prove the person who made you play it rather than
| sell it was "right," ex ante?
| dabedee wrote:
| You raise a valid point about ex ante uncertainty. We can't
| know future outcomes with certainty, and yes, Figma
| theoretically could have failed. But antitrust analysis
| isn't about predicting exact valuations. It's about market
| structure and competitive dynamics. The FTC had observable
| facts: Adobe's dominant market share, Figma's rapid growth
| trajectory, and a purchase price of 50x revenue
| (extraordinary even for software). These factors suggested
| Adobe saw Figma as a competitive threat worth eliminating,
| not just a financial investment. That's the key distinction
| from your dice game; this wasn't pure randomness but
| observable market dynamics. You're right that we can't
| prove the counterfactual. But antitrust law doesn't require
| certainty, just reasonable probability of competitive harm.
| The extreme premium Adobe offered was itself evidence they
| valued removing competition more than acquiring assets. The
| outcome validates the analysis, but even if Figma had
| struggled, preserving the possibility of competition has
| value beyond any single company's success.
| terminalshort wrote:
| But now you are contradicting your initial argument. Here
| you say that the price offered by Adobe was
| astronomically high, and therefore an indicator that the
| offer was not legitimate, but initially you said that the
| FTC made the right decision because the offer was 3x
| lower than the IPO price.
| missedthecue wrote:
| It doesn't prove it. Khan attempted very fiercely to block
| Amazon's purchase of iRobot and she, along with the EU
| authorities, succeeded in preventing it and now iRobot is
| about to file bankruptcy. We don't have the counterfactual
| and founders (nor regulatory agencies) can see the future.
|
| Someone made a good analogy on twitter that Khan essentially
| cut off a genius pianist's right hand, the pianist persevered
| and somehow succeeded in retaining their talent in spite of
| having one hand, and now Khan is taking credit for the feat.
| In the same way, the fact that Figma still exists is not
| proof that she was right.
| terminalshort wrote:
| > If you care about market cap? She was right.
|
| None of the FTC's business
|
| > If you care about employee comp? She was right.
|
| None of the FTC's business
|
| > Number of listings, new potential acquirers for your
| startup, more diverse office geography, right right right
| right.
|
| None of the FTC's business x3
|
| > If you care about consumer choice, she was right.
|
| Ok, so this is the FTC's business. But does Figma compete
| with Adobe in any major areas? I'm not aware of any major
| Adobe products like that.
| maxbond wrote:
| > > Number of listings, new potential acquirers for your
| startup, more diverse office geography, right right right
| right.
|
| > None of the FTC's business x3
|
| > > If you care about consumer choice, she was right.
|
| > Ok, so this is the FTC's business.
|
| You don't think there's relationship between consumer
| choice and a large number of acquirers? These are basically
| equivalent statements, they're both saying "markets remain
| competitive".
| terminalshort wrote:
| Only in the case where both the acquirer and the target
| have directly competing products, which is why I
| specifically mentioned that case and said it would be the
| FTCs business. (And even then sometimes it doesn't.
| Google bought Waze, which was a direct competitor to
| Google Maps, but still both products exist.)
|
| And, no, they aren't remotely equivalent statements to
| each other or to "markets remain competitive." If there
| are 100 products in a market, and an acquisition reduces
| that to 99, it will have no effect on the competitiveness
| of a market, which is why such an acquisition is not
| typically any of the FTC's business.
| maxbond wrote:
| No, that's just wrong, if you let Adobe buy up all the
| design tools then you limit designer's choice to just
| Adobe. Will they come out with a competing product?
| Maybe. That's their business. But the potential is there,
| and Adobe has to stay on its toes and can't coast on it's
| near-monopoly status. Indeed, it's now also possible
| Figma will come out with products to compete with Adobe.
| And just the threat of that has the potential to limit
| all of the hostile behavior towards consumers Adobe has
| been up to for years.
|
| Which is all to say that the market remains competitive.
|
| If you don't think it's the FTC's business to decide
| whether or not that 100 to 99 move is significant, then I
| don't think you understand. Even if it's insignificant -
| it's their business to make that call. You can disagree
| with it, but if you think that isn't their balliwick,
| you're simply mistaken.
| terminalshort wrote:
| Hypothetical future competing products is a ridiculous
| standard. By that logic the FTC could block anything
| because the acquirer could always in some hypothetical
| future be a competitor.
| maxbond wrote:
| It's ridiculous to suggest corporations will treat their
| customers better if they have competition? That if their
| customers have somewhere else to go they have more
| negotiating power?
|
| Adobe and Figma _are_ competitors, right now, regardless
| of whether they have product lines in direct competition,
| at this moment.
| terminalshort wrote:
| No they aren't. Having product lines in direct
| competition is the fundamental definition of being a
| competing business.
| benreesman wrote:
| This is an account not yet three weeks old on a rampage
| of low-effort shouting about why institutions, honesty,
| integrity, standards and decency are pointless,
| counterproductive, and stupid.
|
| I think it might be an alt for Peter Thiel himself! We're
| in the presence of greatness friend, we should just lean
| back and be enlightened.
| holmesworcester wrote:
| I'm sympathetic to a prohibition on big companies buying their
| competitors, but a 3x difference over two years seems too low
| to suggest that antitrust creates more pure business value.
|
| First this is all hindsight now. We don't know the
| probabilities of this outcome vs. others. Figma's shareholders
| didn't at the time, which is why they chose to sell. Khan
| didn't either.
|
| Second, 3x over two years isn't _that_ much. There must be many
| opportunities in SV for all of Figma 's employees and investors
| that could have given them a much higher return than that with
| much less risk.
|
| I don't have this data, but one could look at secondary sales
| in the past two years as a measure of the increased risk and
| opportunity cost, right?
|
| Any delay of people getting liquid impacts the creation of
| other startups, both by the Figma people who can now leave and
| do their own thing and for the companies Figma stakeholders
| would have invested in . This is super hard to measure but it
| is the kind of thing markets are good at measuring when they
| ask shareholders "sell now to Adobe or wait to IPO?"
|
| This seems really good for Figma users, most of all. Most of
| the value destroyed by the acquisition would have been in the
| distortion and likely ultimate destruction of a company culture
| that made an insanely good product.
|
| But those people are capable of going and making new products,
| and maybe Figma at its current phase is now too boring a thing
| for their talents, and should be managed by a more boring
| organization staffed by people who are slightly less able to
| make another Figma.
|
| Who knows, but I doubt Khan (or any one individual or
| organization) is in a better position to assess the optimal
| delivery of what people want than the incentivized distributed
| intelligence of all the stakeholders and the people and markets
| around them.
|
| Again, there are other reasons to do this that markets wouldn't
| quantify.
| benreesman wrote:
| The lengths people will go to to avoid the facts on this are
| fucking remarkable. I'll let Opus explain:
|
| "The Bottom Line
|
| A 73% annualized return would: Easily rank
| in the top 10-20 best-documented investment returns of all
| time if sustained for multiple years Significantly
| outperform virtually all professional fund managers and
| legendary investors Be 7x higher than the long-term
| stock market average Turn $10,000 into $30,000 in
| just 2 years (your 3x example)
|
| Such returns are typically only achieved during:
| Early-stage growth of revolutionary companies (like early
| Apple, Amazon, or Netflix) Cryptocurrency bull runs
| Highly leveraged trades Exceptional market timing
| during recovery periods Small/micro-cap stocks
| experiencing explosive growth
|
| While spectacular, returns of this magnitude are extremely
| difficult to sustain and often involve significant risk."
| holmesworcester wrote:
| Then why did shareholders choose to sell?
|
| In choosing to sell they decided the risk wasn't worth the
| reward.
|
| If you were in their position, would you have sold or held?
| benreesman wrote:
| I have no idea why they agreed to the deal, one imagines
| a bunch of competing interests ranging from late D, E, F+
| round holders, to founders, to influential employees. By
| the time a company is selling to a mega-conglomerate (in
| effect, a holding company) for 20 billion dollars it's
| pretty hard to un-grind the sausage on how a bunch of
| competing incentives got resolved.
|
| As a founder? Obviously I hold unless I know something is
| rotten in Denmark and it's about to collapse like a
| Michael Siebel sale to Autodesk. Are you kidding? I've
| got a startup so successful that I'm already a
| billionaire and my choices are:
|
| - let it ride, be a star, chart my own course - go work
| for fucking Adobe lol
|
| Yeah, easy one.
|
| If I'm an early VC or a limited partner with some
| structural reason to need the cash before some accounting
| period ends or something? Maybe I want the sale. Maybe I
| own a bunch of Adobe stock and I want the consolidation.
| Maybe a lot of things.
|
| Don't know why the deal got agreed to pending regulator
| approval. If I'm an already richer-than-God founder, or
| an employee who can either get full value for my shares
| or get Windsurf'd in some preference shenanigans, or most
| anyone else involved? Then fuck Adobe.
| api wrote:
| Maybe they thought an IPO wasn't going to happen because
| the market would be in bad shape or there would be too
| much regulation there.
|
| Maybe they were seeing the AI boom on the horizon and
| wanted the capital out now to deploy there. They wanted
| to chase AI not hodl some "old" pre-AI thing. A lot of
| people think AI is going to render the entire process of
| which Figma has become a key part obsolete. (I don't.)
|
| Those are two things I can think of to explain this
| behavior.
|
| Also some people like to get out when they're ahead. "The
| world is full of rich people who sold too soon, not rich
| people who sold too late." This makes sense if you are
| generally pessimistic, which many are for various
| reasons.
| adgjlsfhk1 wrote:
| The shareholders chose to sell because it was a decent/OK
| deal for everyone other than the users of the
| software/society at large.
| amelius wrote:
| > This is exactly why we need regulators willing to tell Big
| Tech "no" sometimes.
|
| At some point, "Big Tech" is really "Big Finance" in disguise.
| aianus wrote:
| If I suggest putting your net worth on black at roulette and it
| lands on black, does that make my advice right?
|
| Khan forced the employees and investors to continue working and
| gambling on a company they might not have wanted to continue
| working for or gambling on. It doesn't really matter that the
| gamble succeeded in this case.
| usaar333 wrote:
| I don't see why the market cap proves whether she is correct or
| not. You'd have to compare it to the counter-factual of what
| the value of a Figma subsidiary would be under Adobe today.
|
| This is not obvious at all to me. Instagram (bought for $1B) is
| probably worth ~700 B of Meta's market cap.
| stephen_cagle wrote:
| I wonder if a simpler solution to all this regulartion would be
| something like imposing a tax (fee?) when larger companies
| acquire smaller companies? So something like, "For every order of
| magnitude difference between the acquirer and the aquiree, there
| will be a 100% tax on the acquisition price paid to the US
| Federal government."
|
| So this would basically encourage companies to either have their
| own IPO (no fee at all) or be acquired (merged really) by a
| company of equivalent size. If you are acquired by a much larger
| company, that company will have to pay a (logarithmicaly) large
| fee relative to the acquisition price. If they really want it, no
| problem, but it will be "cheaper" for a more correctly sized
| company to acquire them.
| Jolter wrote:
| I think merging with equal-sized competitors is sometimes just
| as bad for competition as acquiring smaller competitors.
| hashstring wrote:
| I agree with taxing large companies more, however the log fee
| could also hinder the sale of companies that are legit only
| interesting enough for large companies to buy, preventing
| certain startups from being able to successfully sell.
|
| I haven't given this much thought, but my gut feeling is that
| it should be OK for a big company to acquire a smaller one if
| both sides agree and it's not blatant anti-trust material (as
| with Meta acquiring Instagram).
| msdrigg wrote:
| Seems like the regulation works well when it is applied. Why is
| there a need for a simpler solution? Why try to replace it with
| a 'simpler' tax with none of the human consideration about how
| the m/a could lead to less competition.
|
| Like if this regulation was replaced in favor of this tax, a
| big company merging with another big company would be
| considered fine when obviously big company mergers can be just
| as concerning as larger companies buying smaller ones
| tenuousemphasis wrote:
| Chesterton's Fence:
|
| >In the matter of reforming things, as distinct from deforming
| them, there is one plain and simple principle; a principle
| which will probably be called a paradox. There exists in such a
| case a certain institution or law; let us say, for the sake of
| simplicity, a fence or gate erected across a road. The more
| modern type of reformer goes gaily up to it and says, "I don't
| see the use of this; let us clear it away." To which the more
| intelligent type of reformer will do well to answer: "If you
| don't see the use of it, I certainly won't let you clear it
| away. Go away and think. Then, when you can come back and tell
| me that you do see the use of it, I may allow you to destroy
| it."
| scarface_74 wrote:
| Then the companies will just poach all the good employees they
| want and "license" the IP if they care about it from the shell
| of the former company. We see that now.
| missedthecue wrote:
| What problem does this solve? Then my small company is less
| likely to receive acquisition offers which is bad for me!
| nativeit wrote:
| > Khan's critics are more likely to see Figma's success as coming
| despite regulatory scrutiny, not because of it. For example,
| Wedbush Securities analyst Dan Ives told Business Insider, "Figma
| is a massive success, but it's because of the company's
| innovative growth and not due to the FTC and [Khan]."
|
| That would be a _great_ point if there were any indication at all
| that's what Khan was implying. It's either an intentionally
| disingenuous reading of her statements, or else an
| unintentionally dim comprehension of them...from an analyst...
|
| It's also not a great sign that Business Insider thought this was
| the best way to end this article. At the very least, how about
| interrogating whether or not their "innovative growth" might have
| something to do with how healthy regulatory systems might work to
| facilitate such things? Or whether that innovative growth could
| have continued apace under Adobe's management?
|
| I suppose I am being too credulous, and it's more likely the same
| widely shared ideological bent that celebrates free market
| dynamism with each success, and decries oppressive regulations
| with each misstep. A culture that sees virtue in offshoring
| profits while simultaneously using them to eliminate competition,
| erode consumer protections, lobby for preferential tax credits,
| and generally skirt any/all obligations to the society which
| provided them with the opportunities, infrastructure, finance
| markets, skilled workforce, and well-qualified consumers that are
| _all_ prerequisites to "innovative growth".
| scarface_74 wrote:
| On the other hand, now you see companies that don't want to deal
| with government blocking acquisitions do they just get all of the
| people they want from startups and leave the rest of the
| employees high and dry and the investors worse off.
|
| https://www.reuters.com/business/google-hires-windsurf-ceo-r...
|
| Unlike Figma, companies rarely want the startup's product and
| usually end up either abandoning it or making it a part of their
| own offerings by getting their new hires to write it from
| scratch.
|
| Even when they do need the acquiring companies IP, they license
| the IP and then poach the employees.
|
| Microsoft almost did that too with OpenAI during the Altman
| fiasco.
| narcraft wrote:
| There is another side to this coin: Figma's gain here is Adboe's
| loss. It doesn't make sense to use market-caps of specific
| companies as yardsticks of consumer welfare, which is the
| ultimate measure which antitrust actions seek to maximize.
|
| The tradeoffs of allowing or preventing the merger are more
| abstract and counterfactual. We cannot know for sure what the
| world in which Adobe successfully acquired Figma would look like.
| Its natural to imagine concerns of Adobe simply killing,
| enshittifying or failing to improve the product - all things that
| still may happen under Figma's new corporate structure. Also
| consider the potential integrations with and improvements to
| Photoshop that have been missed.
|
| That all being said I think Figma is an excellent product for the
| price and I have no fondness towards Adobe (though I've never
| really been a customer) and I'm glad that Figma exits as its own
| delightful product.
| brokencode wrote:
| We can't know what would have happened exactly, but can be
| certain there would have been less competition if Adobe had
| acquired Figma.
|
| We can't know for sure whether increased competition is going
| to lead to a better outcome here, but we can say with a high
| level of certainty that more competition usually leads to
| better outcomes.
|
| The fact that this also turned out to be fantastic for
| investors is just icing on the cake. Increased competition in
| markets is a worthy goal in itself.
| narcraft wrote:
| Fantastic for investors in Figma specifically, not so
| fantastic for investors in Adobe. My point is that the IPO
| price and subsequent price increase are not themselves proof
| (or even relevant) that preventing the merger was a good
| thing.
|
| There most likely would have been fewer firms if the merger
| went through (though it could be possible that more
| competitors enter the market in that alternate timeline). Idk
| if that constitutes less competition necessarily, and
| competition understood as number of firms or something
| similar certainly doesn't always lead to better outcomes.
|
| In the cases of "natural monopolies", consumer welfare is
| maximized when one firm is able to realize all the economies
| of scale because the benefits of mass production are so large
| that goods/services can only be produced at the lowest cost
| with sufficient consolidation. Utilities like electricity and
| water are often used as examples of natural monopolies.
|
| You did say usually in fairness and I'd agree that increased
| competition usually leads to better outcomes. And we usually
| see multiple firms competing in any given industry without
| antitrust intervention.
| brokencode wrote:
| It's not proof that blocking the merger was good, but it
| does undermine many of the arguments against blocking it.
|
| I'm all for the government getting out of the way of
| business, but we've seen a large amount of consolidation in
| many software categories.
|
| Adobe's market share is pretty extreme already in the
| creative software space, and I think it is reasonable for
| the government to step in to try to prevent further
| consolidation.
|
| I agree with you that it's really unknowable whether
| blocking or not blocking was a better choice. But if we
| only made decisions based on knowing the outcome, we'd
| never do anything.
| antithesizer wrote:
| Lmao you cannot be serious. Lina Khan is right about m&a but if
| you don't understand how absurd the current price of FIG is you
| should never comment on anything economics-related ever again.
| rcpt wrote:
| If the stock goes up then you were right. If the stock goes down
| then you were wrong.
|
| I've learned to accept this when it comes to things like TSLA or
| Bitcoin. But it's new to me that we do legislation like this.
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