Comment by qeternity
1 month ago
Spoken like someone who has never started a business. Brex raised much less than $5b and Capital One apparently thinks it is worth more than that (otherwise they wouldn’t buy it).
This is called value creation.
1 month ago
Spoken like someone who has never started a business. Brex raised much less than $5b and Capital One apparently thinks it is worth more than that (otherwise they wouldn’t buy it).
This is called value creation.
I think the investors who put $300m in at a $12b valuation would disagree
I don’t think you understand how liquidation preferences work.
They will get $300m back.
Opportunity cost sure. But zero nominal loss.
Definitely. No company has ever overpaid for another company. No fraud or FOMO-driven overvaluation has ever occurred in an acquisition. And all acquisitions have always turned out for the best. It's all 100% pure value creation.
Your statement is true on average because the world’s economy is continuing to function.
> Your statement is true on average because the world’s economy is continuing to function.
The entire field of economics depends on post ipso facto statements like this.
"functioning" is doing a lot of heavy lifting here
Oh wow, I don't even know where to begin with that.
Like, the world economy can't continue to function even if acquisitions were only 80% value creation on average? Or does the entire world economy depend on companies acquiring other companies with 100% value creation on average, such that it continuing to function logically implies 100% average value creation?
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Definitely. And some random guy on HN knows the value of Brex to Capital One better than Capital One does.
Brex can be worth $5b today and also be worth less in the future. These two realities don’t conflict. Acquisitions can and do end poorly. But the vast majority work well. I am not sure what you don’t understand about that?