The Undertakers of Silicon Valley (2018) | Hacker News Reader

The Undertakers of Silicon Valley (2018)

logicmag.io

95 pointsallenleee14 comments

I wish it had more details on the company liquidations. Like I'm curious - what did the unfortunate Pets.com shareholders eventually receive? How long did it take? Which assets were sold, which were just trashed? Any interesting fights with shareholders/bondholders? Book values of startups (including long running but still rather poor startups like Tesla or Uber) are usually very low.

I was a 3dFX shareholder when their fortunes turned, and they were "acquired" by nVidia. Or at least just their IP assets were. As a regular shareholder, I got nothing- no payout, no nVidia shares. My modest investment became worthless nearly overnight. Somebody made money on this deal- it wasn't me, and it wasn't put up for shareholder vote.

Probably the funds from the acquisition did not even clear the debt on the cap table, and thereby did not leave any money for equity shareholders like you

All you wanted to know here:

https://www.courtlistener.com/opinion/1900489/in-re-3dfx-int...

What I like about bankruptcy in the west is how public everything has to become.

Probably the stock liquidation preferences didn't extend to your class of stock. Also debt.

Right; debt holders get paid out before shareholders...which is only fair. Debt covers things like rent and employee wages--owners of the company should get paid out last.

Agreed. Debt is senior to any stock but not all stock is equal; there’s liquidation preferences and who is at the table. Employees usually get the shaft even if founders technically hold common. Employees aren’t at the table.

The article mentions this. It’s a subtle point about prisoners dilemma. In an acquisition, there is no sense of equity, just interest.

Interesting article, however you can tell that the author was definitely trying to up their word count. It is probably about 4-5x as long as it needs to be.

Yep. You can really tell how hard they're grasping at straws with stuff like this:

>If a founder fails, tech discourse interprets it as a sign of young vigor. In a country in which twenty-five-year-old white rapists are “still boys” and black twelve year-olds on the playground “look like adults,” the question of who gets to be a kid and who counts as a grown-up is clearly charged with privilege.

Just have to shoehorn race in somehow, adding an entire paragraph to the article that is nothing more than filler.

The writer makes his point about privilege with a parallel and examples, even if it's an uncomfortable point made in an uncomfortable way. Hardly filler. It builds an argument for his conclusion about double standards.

A university friend wound up working for insolvency accounting firms. He said you need a heart of steel and a head of steel, and it costs. I didn't like him as much before he told me this, as I did afterward because I think we need to pay respect to the undertakers, they do a job nobody else is willing to do, and treating them like pariahs or untouchables is bad.

That said, Asset stripping a viable company to get its value as a KPI is kind-of a "thing" and I think we all suspect the shell-game of 'who is first in the creditors list' plays out to somebody else's advantage. I don't trust insolvency because I don't trust the compacts which puts some people at the front of the queue for settlement.

In Australia, government guarantees on workers statutory entitlements is good. But after that, its banks before everyone. Almost anyone I know, who engages with an insolvency is in the 'you are unsecured, go away' camp. Thats a lot of downstream hurt for small traders, self-employed, productive people.

Why does it say that Pebble Tech is a failed company? I thought it was aquired by Fitbit?

Because they went bust. Only then Fitbit bought what they deemed valuable.

https://investor.fitbit.com/press/press-releases/press-relea...

Fitbit didn't acquire Pebble; they acquired some assets from Pebble.

The corporate entity Pebble still existed, with all the liabilities left on the balance sheet, and someone had to wind it down.

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