Comment by codelion
1 year ago
that's a good point about the strategic value exceeding the standalone business value... i think a lot of acquisitions are driven by that, especially in tech. it's interesting how much "potential" gets priced in, even if it's not immediately obvious how that potential will be realized.
It is usually the justification trotted out to justify acquisitions.
In general (not tech in particular) it turns out to be false more often than it turns out to be true. Large acquisitions tend to lose shareholders money but benefit management (because they profit more from running a bigger business).