
Markets are strong, but big startup M&A deals just aren’t happening - janober
https://techcrunch.com/2017/08/05/markets-are-strong-but-big-startup-ma-deals-just-arent-happening
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adventured
The very high multiples are one obvious issue as noted in the article.

The other, is that there are simply a lot less public companies available
today to do acquisitions. There are 40% fewer public companies versus 1997, in
an economy well over twice as big in nominal dollar terms.

Companies like Tumblr and Polyvore were eaten by Yahoo for large sums. There
is no Yahoo to throw around its market cap for acquisitions now. There's also
no AOL, and so on. There has been substantial consolidation, with fewer
replacement buyers coming into the market via IPO. Is Verizon going to spot
the next Flickr? I wouldn't bet on it.

Further, Chinese tech companies, many of which have plenty of money to spend,
are finding it almost impossible to make large foreign acquisitions now, due
to Xi's very tight policies on capital controls. That has gotten a lot worse
in the last year.

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holydude
Yea it is a bullshit situation. Western companies cant acquire chinese ones
and chinese ones cant or wont acquire the western ones.

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jfim
Can you elaborate on why that is a bullshit situation?

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Analemma_
If you believe in laissez-faire or neoliberal capitalism, the actions of the
Chinese government are obstructing "the natural order of things" and are hence
bullshit.

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bitwize
Given how thoroughly laissez-faire and neoliberalism have fucked the world
over, especially the world's poor, you might forgive us for not thinking it's
bullshit as strongly as you do.

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conanbatt
Source?

Extreme poverty has been rapidly decreasing in the past few decades

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startupdiscuss
Confused: strong public markets are an argument for IPOS.

They are not an argument for M&A. If the acquiring company pays in stock, it
may even be an argument against M&A (unless you think it is just "temporarily
inflated").

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davidreiss
Agreed. Strong markets are when startups IPO and established companies merge.

We have seen some big startup IPOs ( like SNAP ) and some decent mergers
especially in the pharma sector ( for tax benefits ).

