On Sep 15,$アドビ(ADBE.US)$announced it has entered into a definitive merger agreement to acquire Figma, a web-first collaborative design platform, for approximately $20 billion in cash and stock. The combination of Adobe and Figma will usher in a new era of collaborative creativity. However, the stock market interpreted the merger in the opposite way, by driving the stock price down 16.79%. Why did Adobe drop like a stone? Is merger & acquisi...
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Johnnie Worker :
I mean buying Figma is not a bad idea, since you dont need to play around with a strong competitor and can monopolize the market. But seriously, the premium $アドビ (ADBE.US)$paid is way too much! 1) Paying 50x PS is insane, the PS ratio of Adobe itself is only 8.4 2) Figma's valuation was just $10 Billion back in June 2021, when the market was literally crazy, and it's supposed to drop further to like $5 bcz of the current bear market. So Adobe paid 4 times! The reason is probably due to Microsoft's potential offer, and Adobe is afraid. 3)The cash and stock of the deal is 1:1, but $10 B in cash is not a penny, enough to give so much pressure on Adobe's operation, especially during its downtrend period giving that the earnings miss the estimates
lightfoot :
20 billion is much capital outflow. Will the benefits of this merger be recognized quickly as an assets or more costs to implement. it could drag down the stock price. investors look for positive signs but later could prove very equitable for all.
PaAg1378 :
M&A is a business decision akin to investors deciding which equities to acquire. Boon or bane really hinges on the accuracy of the calculated risks and profitabilities which in turn are always dependent on macro and micro determinants in the economy, market, industry, stakeholders and organization. I will like to see Mastercard and Paypal together
Johnnie Worker : I mean buying Figma is not a bad idea, since you dont need to play around with a strong competitor and can monopolize the market.
But seriously, the premium $アドビ (ADBE.US)$paid is way too much!
1) Paying 50x PS is insane, the PS ratio of Adobe itself is only 8.4
2) Figma's valuation was just $10 Billion back in June 2021, when the market was literally crazy, and it's supposed to drop further to like $5 bcz of the current bear market. So Adobe paid 4 times! The reason is probably due to Microsoft's potential offer, and Adobe is afraid.
3)The cash and stock of the deal is 1:1, but $10 B in cash is not a penny, enough to give so much pressure on Adobe's operation, especially during its downtrend period giving that the earnings miss the estimates
Shahram Sarooj2 : Yes
sgmic66 : k
lightfoot : 20 billion is much capital outflow. Will the benefits of this merger be recognized quickly as an assets or more costs to implement. it could drag down the stock price. investors look for positive signs but later could prove very equitable for all.
PaAg1378 : M&A is a business decision akin to investors deciding which equities to acquire. Boon or bane really hinges on the accuracy of the calculated risks and profitabilities which in turn are always dependent on macro and micro determinants in the economy, market, industry, stakeholders and organization.
I will like to see Mastercard and Paypal together
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