DocuSign Shares Plunge 42% | Hacker News Reader

DocuSign Shares Plunge 42%

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42 pointsushakov81 comments

I don’t understand why (from a technical or legal perspective) this company exists.

Their product’s user experience is strictly worse than having an HTTPS portal that lets people upload and download files. Is the value add that 99% of companies that receive signed documents are too incompetent to secure such a server?

The only other thing I can think of is that it’s the javascript “blindly click through this PDF to sign” widget.

Surely, there’s some value add behind the scenes? Right?

I think you’ve got it there: it’s the “click here to sign this” thing that they’ve packaged into something a non-IT-focused company can use. It was relatively useful for them before, but with the pandemic you have tons of companies looking for a way to get people to sign agreements and submit paperwork in a legally binding fashion without needing to meet in person. The “legally binding” thing is important, I think: you could set up a click portal, but it seems like DocuSign is standing on their “this will hold up in court if challenged” claims. That transfer of liability is the other attractive element.

There's also the "why go for the less known option when you can afford the industry leader" effect.

Many companies have/used to have this advantage: Salesforce, Oracle comes to mind

If, legally, your company needed to defend in court why it set up its legally binding signature software in the manner it did, then "we used the company everyone else uses", will probably be enough to demonstrate due diligence. Few judges or juries are going to find "doing things the industry standard way", to be criminal negligence.

Someone with a more software-informed background may disagree, but the judge and jury are unlikely to be programmers. It's the modern equivalent of the old "nobody got fired for buying IBM".

if i sign using Apple Preview is it less legally binding?

do we have a law, which says "use DocuSign" else a signature is not as legally binding?

honestly, it feels like a marketing and scaremongering to justify the higher price and preference over the competitors

I just had this conversation with my lawyer, in the Netherlands, and probably most or Europe, signing digitally is not legally binding. I’m sure this will be different for different jurisdictions.

from https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eSig...

> An electronic signature (either simple, advanced or qualified) shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures.

more specifically:

> Regarding qualified electronic signatures, they explicitly have the equivalent legal effect of handwritten signatures across all EU Member States.

fire your lawyer i guess

To paraphrase my (non-lawyer) understanding of these two FAQ passages:

1. Evidence of an electronic signature is not a priori inadmissible in court.

2. A "qualified electronic signature", i.e., a cryptographic digital signature created by an approved hardware crypto device using keys from a certificate meeting certain requirements verified by an approved certification authority, is equivalent to a conventional paper signature.

If anything, this suggests to me that, in many practical contexts, "'click here to sign'-style Web form signatures are not legally binding" may well be a reasonable plain-language summary of Dutch law, notwithstanding EU e-signature regulations.

This is nonsense.

Adobe offers a handy review of the Dutch law on this subject https://helpx.adobe.com/sign/using/legality-netherlands.html

I don’t think you read or understood the link you posted or my original comment?

You know I was saying that in the context of gp asking if it’s legal to sign in Apple preview which is essentially appending a picture of your signature to a pdf with no guarantee from a third party if it’s you that signed it.

I don’t know, maybe English is not your native language, in that case, you’re mistake is understandable.

Your mistake, not mine. You’re confusing “legally binding” and “binding evidence”, these are two different things.

You will have a bad time if you sign a contract using apple preview and then try to argue that you’re not bound by that contract.

From the page you linked to:

> For documents signed with a non-qualified electronic signature (e-signature), the Dutch Supreme Court confirmed that the signature must be ‘sufficiently reliable’ for the document to be classified as binding evidence. If the documents are not classified as binding evidence, additional evidence may be required to demonstrate the authenticity of the e- signature.

Apple preview is not sufficient in itself and needs additional evidence to support the reliability of it. I never said that it could not be used as evidence, but it’s not sufficient in itself.

Again bro, reading skills, work on them.

I’m sorry that you’re incapable of understanding the text you just pasted. It confirms everything I’ve said.

> Apple preview is not sufficient in itself and needs additional evidence to support the reliability of it.

The situation is not meaningfully different than with a wet signature on paper.

It doesn’t matter if you sign the contract with a pen or using the preview tool, in the Netherlands you are equally bound by both. If you dispute the authenticity of the signature, the situation will not be any different between the two.

And bro, work on your attitude.

Hey - you also broke the site guidelines repeatedly in this thread - can you please not do that? We'd appreciate it.

https://news.ycombinator.com/newsguidelines.html

You broke the site guidelines badly and repeatedly in this thread, with flamewar comments and swipes. Can you please not do that? We're trying for a different quality of conversation here.

If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.

It really depends on the context. For plenty purposes, pretty much anything that indicates mutual agreement can be legally binding. E.g. if you call a company to order something, you enter a contract without anything written down at all, and it comes down to "but can you make a convincing case this actually happened as you say it did". Business deals can be made over email. etc. In any such cases, the digital signing services like DocuSign just add another way of documenting agreement. (and presumably people think it's clearer proof or more convenient or ... - it's an interesting question what a court would make out of whatever DocuSign records about a signature)

For other things, there are stricter legal standards of what kind of form of agreement is required, and only then they don't work. I've mentioned this example here a few times, but recently a German grocery delivery startup fell into the trap of using DocuSign for their work contracts. You can enter work contracts just fine with it, but specific clauses in work contracts require paper signature (or a strong cryptographic digital signature), so suddenly the contracts they had intended to be temp contracts were permanent contracts.

(I believe DocuSign also offers the "proper" qualified cryptographic signatures, but that's not the usual flows people think of when DocuSign is mentioned)

A digital signature made using a government-issued smartcard is always a legal signature in Europe.

> a government-issued smartcard

Where are governments involved in directly issuing smartcards?

The one "in my wallet" (spoiler: actually lurking in the back of my desk drawer, I use it so rarely) is issued by a private company who just happen to be on the government's list.

Belgium and Estonia, at least. It's part of the national id.

Just off the top of my head: Germany, France, Finland, Portugal, Spain, Sweden, Romania (in Cluj, soon everywhere)

I'm sure there are many more.

E: Also Croatia, Czechia, Latvia, Liechenstein, Lithuania, Slovakia

How does your counter party prove that you signed it and they didn't forge it when you sue them?

how will they prove they didn't forge mine by making a fake account/e-mail address?

Because you signed using your private key.

How do you do a cryptographic signature in Apple Preview?

By downloading Acrobat Reader instead.

So nothing to do with the context of the thread.

Lol, exactly

The fact that you presumably emailed the document back to them leaves a huge forensic trail.

The alternative proposal, or at least one of them, as I understand it is you upload the pdf to some site hosted by the counter party, where they would also control nearly all logs.

Doesn't need to be DocuSign, but seems really helpful for it to be run by a third party:

Imagine showing up to court and trying to argue that a record in your company's database was proof that the defendant signed a legally binding contract with you. What if they deny having ever signed it? Is a judge or jury really going to take you at your word?

They just might? Did you recently sign anything shopping in the supermarket? Probably not, yet a valid contract was formed nonetheless.

This is really one of those falsehoods programmers believe about the law. No, courts do not in fact care if your method of signalling agreement is not some unalienable public key cryptography scheme. Unless the law explicitly states otherwise for the kind of contract you are entering into (e.g. requiring a notary seal), contracts are regularly formed a thousand different ways. Advertise a cash-back policy? Great, that's a contract you enter into with every buyer.

The problem isn't whether a valid contract was formed. It is how many billable hours it will take the lawyers to agree on the exact text of that contract. Perhaps the defendant claims that version 5 of the contract was displayed to them, even though the database record says they signed version 6. If the court case is over a provision that was added in version 6, that could matter a lot! With DocuSign, you have a neutral third party who can step in with a definitive answer. That has real monetary value compared to the company having to argue back and forth in open court

Well, first off, we can throw out the ideas of juries because contract law is civil, not criminal. You'd be dealing with judges who are well-versed in the actual legal system, and would know that the mechanism of the signature is not what makes it legally binding. DocuSign adds comfort to non-lawyers, but really isn't going to make any difference in court.

And that is the actual business value - not legal, but administrative. Easy to send out, receive back, track who signed what, and when. The actual signature is a nifty feature, but isn't the business value.

> Well, first off, we can throw out the ideas of juries because contract law is civil, not criminal.

Depends on the jurisdiction/norms. Civil juries are common in the US, for example.

Yes it is in the name. They provide an interface so the parties can sign the document. And then they store the fact that the document was signed in a database and attest to it if required.

Even if you know how to develop that (many companies don’t) and even if you wish to spend your developer resources on that instead of whatever brings in the money its not a good idea to roll your own in this case. Why? Because you are a party to the agreement you wish to attest to that it has been signed. If there is a disagreement about anything: who signed the document, when did they sign the document, what was the exact document they signed it will be your database against their word. Who knows, maybe you modified your database for your own sake? Changed the document or faked the signature altogerher. But if you paid for the service of a 3rd party who doesn’t have a financial incentive in the agreement then in any potential dispute you can get them to testify (probably in writing) to what document was signed and who signed it and when.

doesn't private key signature guarantee authenticity even if you control the db where signed documents are stored? you know the public key and can check if document was signed with private key of signer.

What are the odds that the client has a verifiable private key?

At least 99% of the people signing documents won't have a public key that anyone else can verify. Even if you help them generate one, they'll probably forget about it and you'll be the only one with a record of it, so once again we're left having to trust that you didn't tamper with your records.

In particular, the business could sign the version it sends to the consumer, and the consumer wouldn’t even have to know about it (pdf’s support attachments).

I get the feeling this whole business could be wiped off the face of the earth by an open source hobby project and an enterprise sales team.

EU has it's own open-source Digital Signature service

https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/Digi...

Yes. Now try to select a thousand random people from all walks of life and see how easy it is to get them to get them to generate a public private key pair amd sign a document with it.

It's included on the national id smartcard in several EU countries.

I’m a very technical person, and a citizen of an EU country. I have no idea if my national ID card can do that. Even if it can do that I don’t have a card reader to push it in, and I don’t know what software I would need to sign a document with it.

I can figure out all of the above, after all I am paid to figure out things about computers. Can everyone do it? The older gentleman who drives a taxi? The nice lady who edits non-fictional books? The dancer, the barista, the construction worker, the pilot?

I don’t have an opinion on what the value of DocuSign’s business should be. I think they have an easy to replicate service with a very shallow moat. But that doesn’t mean that they don’t provide a service to people.

In the EU there is this qualified electronical signature. It is legally binding like a handwritten signature and has to be accepted everywhere in the EU. Some EU country issue them via ID card. But you can get one for free by using https://www.zealid.com/en/ They have a app where you can sign PDFs for free. Everywhere else a QES can cost up to 150€

> has to be accepted everywhere in the EU

So you mean it's got 10x less legal weight than the Schengen accords, that guarantee you won't have a passport check going on or coming off a intra-EU flight in France?

Good luck with that. Both France and the Netherlands have both had their council of state decide, relatively recently, that violating EU agreements does not violate EU agreements.

I mean it's commercial law, so there is no high burden of proof in the first place, so I'm not so sure what these signatures add in the first place, but the fact that the EU decided something doesn't seem to carry much weight anymore.

right, so it needs to be a independent 3rd party company like a document escrow service. that does not means this company would have that astronomical valuation. like we have plenty of escrow services today for legal works.

Funny part is, at the end, a lot of people will "Print to PDF" the resulting PDF, which strips electronic signatures (last time I checked).

Most people only experience this part of DocuSign - a simple workflow that may require two parties to sign.

There are significant use cases around complex workflows and document management. Red-lines, mutli-party contracts, delegation, record keeping, etc.

In September 2021 a €3,000,000,000 (!) contract between the Austrian federal railways (OEBB) and the Swiss-based train manufacturer Stadler was annulled after "a legally-impermissible electronic signature" was used on the purchase agreement[0]

[0] https://www.cryptomathic.com/news-events/blog/all-trains-can...

TL;DR: The document was signed using a signature issued by a country that was not recognized by the other as being a legal electronic signature provider.

...and if they'd used Docusign, that wouldn't have fixed it

I suppose it'd be part of DocuSign's job to validate whether the given electronic signatures are legally binding in the relevant legal systems. If they don't, then their service seems useless.

people of WallStreetBets have shorted it (i assume over-leveraged) and now reporting mind-boggling returns

one guy turned $40k -> $800k

some other dude $2k -> $50k

Ask HN: Why is Docusign a $50B company? [1]

The thread was 6 days ago, Someone read it on HN? Or did they start shorting it long before?

[1] https://news.ycombinator.com/item?id=29363897

the guy with $800k said in comments that he didn’t like the stock

That's just a meme phrase on wsb

one does not simply put $40k on option based on liking

unless it's WSB

I think I better pay more attention to WSB.

>Someone read it on HN?

My immediate thought on seeing this story today was that the story 6 days ago was put there because shorters had taken positions, not that shorters became interested in the company because of the story.

That might have been. The new user who signed up to ask "Why is Docusign a $35bn company?" a few days later was a little more obvious...

more likely it was just a coincidence, but there might have been a few of us who placed bets after reading that post

I would be shocked if it was a coincidence. Online discussions have been used to manipulate the market for decades now.

Step 1: Take your position in the market.

Step 2: Go kick up discussions to impact the stocks at play.

Step 3: Take your profits.

This is an old, old game, we just have new players getting into it recently.

yeah, but how can a HN discussion make a company lose $25B on a day?

wouldn't SEC be investigating already?

The loss is due to their most recent filing, from a couple days ago.

And yes, the SEC could very well investigate anyone who took a short position in the days prior who had insider connections. It isn't like they put out press releases when they look into things, so unless you know for a fact that aren't investigating anyone... anything is possible.

I find that HN discussions tend to be symptoms of other discussions online - the HN thread was likely not from someone manipulating the market. It instead was probably a sincere question from someone who saw someone pumping it up elsewhere online. I suppose we could always just ask them what prompted the question if you are really curious.

reminder: just a couple days ago this was a $50b company, now it's $26b

Even $26 billion seems a bit high given their non-tangible moat depreciates by the day.

Agreed. I've done some recent real estate transactions and almost none of the paperwork used DocuSign. Just clones.

Nearly to pre-pandemic levels.

And it will go to zero if SalesForce ever decides to get into this market (think of all the realtors that use SalesForce and also use DocuSign).

Doubt that would happen. DocuSign provides signing capabilities to other CRM packages and software like Microsoft, Google, Oracle, SAP, Workday, none of which would take kindly to Salesforce taking over DocuSign.

I don’t think they would buy DocuSign - I think they would compete with them by building their own.

Salesforce also happens to be an investor in DocuSign.

If they do, it’s not a very big portion. [0]

[0] - https://www.nasdaq.com/market-activity/stocks/docu/instituti...

$563 million vs expected $573.8 and it fell 42%? What am I missing?

damage control

who in their right might would think "The company missed the target by x%. Now this resulted in loss of $25B"

Is the bubble popping?

same thing with Peloton

i have no stakes in the game, but i predict the Metaverse too will pop

Peloton is just a failing, overpriced attempt at this

The Meatverse [0] on the other hand is about to go exponential! Why have stakes in the game when you can have steaks instead?

[0] https://meatver.se

loved the joke, i'm definitely looking forward to make sure i have all the steaks i can get

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