
Gilt’s Unicorn Tale Comes to an End After Being Acquired for $250M - ssclafani
http://techcrunch.com/2016/01/07/gilts-unicorn-tale-comes-to-an-end-after-being-acquired-for-250m/
======
stephenboyd
They were purchased by Hudson's Bay Company, which was founded in 1670. It
almost seems anachronistic to see a historical institution from the 17th
century buy up a hyped tech company.

TechCrunch's front page headline for this is "Gilt Gets Acquired For $250M by
Saks Fifth," which wouldn't be as interesting and isn't even accurate since
Saks is just another HBC subsidiary. This is like if the East India Company
bought Groupon.

~~~
Animats
Well, what really happened is that NRDC Equity Partners, formerly National
Realty & Development Corp, a mall developer, did a sequence of deals. These
resulted in them owning Saks, Macys, Lord and Taylor, and Hudsons Bay. After a
few reverse mergers, Hudsons Bay became the parent company. NRDC's business is
buying troubled retailers and turning them around. They're surprisingly good
at it.[1]

[1] [http://business.financialpost.com/executive/management-
hr/ho...](http://business.financialpost.com/executive/management-hr/how-
richard-baker-engineered-hudsons-bay-co-s-stunning-turnaround-with-a-leap-of-
faith-in-real-estate)

------
spaceflunky
$271MM in investment and a $250MM purchase price.
[https://www.crunchbase.com/organization/gilt-
groupe#/entity](https://www.crunchbase.com/organization/gilt-groupe#/entity)

Does that mean that the investors got all the money and anyone holding common
stock was basically screwed?

~~~
hkmurakami
Yes. The preferred will get the payout. If there were any holders of debt
(which is senior to preferred -- his is why the yield on preferred shares of
mega corps are higher Than the company's bonds), they will get paid before the
preferred.

Execs will renegotiate their compensation contracts with the acquirer and
likely have fairly lucrative contracts (often happens to sweeten the deal).

~~~
tacoss
It's not so much to "sweeten the deal" as it is to make sure the execs don't
flee, leaving the acquirer with an organization that they have no idea how to
run.

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ojbyrne
Rumors seem like One King's Lane is going to follow suit:

[http://recode.net/2016/01/06/one-kings-lane-once-valued-
at-9...](http://recode.net/2016/01/06/one-kings-lane-once-valued-
at-900-million-is-likely-to-sell-for-fraction-of-that/)

Lots of unicorn blood to be spilled.

------
colmvp
It already makes me feel a bit old to remember the days when Gilt, Fab,
LivingSocial, and Groupon were all riding hot as variants of discount deals
and but one by one have fallen from grace.

~~~
adventured
Back in the 1990s, people seemed to constantly talk about "Internet time."
Referring to the sense that a year online, seemed like forever - especially
given most people had spent very little time online, the Web was expanding at
a rate essentially never seen before, there was little to compare it to
historically, it all seemed to change a lot in one year. It still sometimes
feels like the Internet time effect, when you refer to the brief era of
Groupon's boom - it seems like it was a decade or more ago, when it was just
three to four years.

------
SatoshiRoberts
Amazon has such a commanding lead over everyone in ecommerce, it's going to
take more than scale to beat them out.

~~~
adventured
Amazon has merely a slice of ecommerce. They have a commanding lead only in
their type of ecommerce: being the new age Walmart of the Web. That leaves
room for the other 80% of the market (in Walmart's case, they couldn't
dominate most categories eg: dollar stores, Target, Costco, Home Depot, paint
stores, convenience stores + gasoline, banking, pharmacy, clothing, tens of
thousands of boutiques, grocery stores, Macy's & upscale, jewelry, video
games, electronics, liquor stores, and on and on).

You have to do what Amazon isn't doing. Ultimately as ecommerce doubles in
size in the US over the next ten years, Amazon is not going to get most of
that. It's a staggering opportunity in terms of scale.

They couldn't beat eBay at auctions. They couldn't beat Craigslist at
classifieds. They can't beat Priceline or AirBnB. They couldn't beat Google at
search. They couldn't beat Apple at phones. They won't own online restaurant
ordering. They will probably fail at trying to own services (Angie's List,
legal, health, whatever). Amazon is going to lose in most things not directly
tied to what they do today.

Amazon's inability to dominate the other 80% of ecommerce, is your
opportunity.

------
throwawaythat1
This is OT but how come submissions which have less than 12 points appear on
the first page? Has anyone figured out the HN algo? There are many other posts
with far greater points yet this appears. Maybe techcrunch has higher ratings?

~~~
hkmurakami
It has a time decaying value function. If the points accumulate rapidly upon
submission, you can reach front page with as few as 5 up votes. This often
happens for github repo submissions.

~~~
tamana
Does it stay on the front page with so few votes?

This sounds trivially gameable by voting rings.

~~~
adventured
No, it'll melt and quickly fall off the front page if it doesn't get more
votes in an appropriate amount of time.

It's not trivial to game over time. HN has been very successfully handling
attempts at gaming for years. If it didn't, the site wouldn't function at all
given its traffic, it would be overwhelmed with crap 24/7.

~~~
mkesper
Though being on front page dramatically heightens the possibility of getting
further clicks (without any gaming).

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techterrier
Can't say I'm shocked. Everything I've been interested in buying from Gilt I
could find cheaper elsewhere just by googling.

------
gcb0
"unicorns" are only interesting for Goldman Sachs and the like for the
possibility of a inflated IPO.

btw, did Facebook deliver any dividends?

~~~
hkmurakami
FB has never issued dividends to common stock holders.

[http://m.nasdaq.com/symbol/fb/dividend-
history](http://m.nasdaq.com/symbol/fb/dividend-history)

~~~
gcb0
hence my point.

this is only to lure people into stock-betting, a zero sum game where the
earlier people to join have a great advantage.

~~~
geofft
There is value in a non-dividend paying stock beyond the stock market itself:
ideally, the market cap estimates the value of the company if it were to be
acquired, and someone buys your shares from you. So it's not simply stock
market participants guessing about other stock market participants. There is
an actual, valuable, buyable product being traded, namely the company itself;
it just happens to be traded in the form of lots of tiny shares.

Whether the chance of an acquisition happening is sufficiently non-nil as to
be worth caring about is a legitimate question. It's not completely unheard of
even for tech companies (cf. Dell), but it's certainly not the norm.

Also, note that the stock market isn't zero-sum: when the value of a stock
goes up, wealth is created. Nothing goes down. If a company IPOs at $10/share,
I buy it at $12, and that share gets purchased for $14, nobody loses money.
The original purchaser of the share made $2, I made $2, and the final owner
now owns a product which the market thinks is worth paying $14 for. There may
be another sense in which this activity is meaningless, but it's not because
it's zero-sum.

~~~
AznHisoka
Keyword here is "ideally". Stocks are just a very elaborate pyramid scheme in
which you rely on a greater fool to buy your stock at a higher price. It has
nothing to do with owning a share of a company unless you get paid dividends.

Plus what are the chances Google or Apple getting acquired? Once you go public
that rarely happens.

~~~
geofft
Dell actually got acquired very recently. Google did the weird Alphabet thing.
Apple had the entire NeXT saga.

It's not likely to happen _soon_ , but unless you're a "fool" or someone who
makes their money on foolishness arbitrage (which, again, you can do without
being zero-sum), that's not the point of stocks, anyway. Buy a bunch and leave
it alone until you retire.

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SatoshiRoberts
JustFab is on the cutting block too

