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Comment by aetherson | Hacker News Reader

Suppose that you have an opportunity to play a game. The game is you roll a fair normal six sided die. If it comes up a 6, you get $60B. If it comes up a 5 or 4 you get $30B. If it comes up 3 or less, you get $0.

This is clearly a valuable game! It is worth in expectation $20B. But it also has a 50% chance of being worthless to you.

Someone offers to buy it from you for $20B. You agree, giving up some upside for some downside protection.

But then someone else says that's not allowed. So you play the game and you roll a six and get $60B.

Does that prove the person who made you play it rather than sell it was "right," ex ante?

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You raise a valid point about ex ante uncertainty. We can't know future outcomes with certainty, and yes, Figma theoretically could have failed. But antitrust analysis isn't about predicting exact valuations. It's about market structure and competitive dynamics. The FTC had observable facts: Adobe's dominant market share, Figma's rapid growth trajectory, and a purchase price of 50x revenue (extraordinary even for software). These factors suggested Adobe saw Figma as a competitive threat worth eliminating, not just a financial investment. That's the key distinction from your dice game; this wasn't pure randomness but observable market dynamics. You're right that we can't prove the counterfactual. But antitrust law doesn't require certainty, just reasonable probability of competitive harm. The extreme premium Adobe offered was itself evidence they valued removing competition more than acquiring assets. The outcome validates the analysis, but even if Figma had struggled, preserving the possibility of competition has value beyond any single company's success.

But now you are contradicting your initial argument. Here you say that the price offered by Adobe was astronomically high, and therefore an indicator that the offer was not legitimate, but initially you said that the FTC made the right decision because the offer was 3x lower than the IPO price.

No, the argument is that Adobe willing to pay a high price is a good signal that Figma was not a dice roll but actually worth much more than Adobe was willing to pay.

If it was known that Figma was worth more than Adobe was willing to pay, then why did Figma take the deal?

I think it's reasonable to formulate this as two outcomes (Figma independent and Figma bought by Adobe) and each firm's preferences. From Adobe's standpoint, outcome A has huge tail risk (Figma innovates and eats Adobe's business) so paying a lot for outcome B might be ok. From Figma's POV, they aren't really helped by that tail as much as Adobe is hurt by it (either way they're rich, unless they crash out and become poor), so Figma would love to play it safe and sell the tail gamble. Adobe is paying to buy the high tail and low tail from Figma, but Figma probably doesn't care too much about selling the high tail compared to selling the low tail; meanwhile Adobe mainly wants to buy the high tail. I think it's very reasonable for Adobe to value the high tail at much more than Figma values getting rid of the low tail (Adobe is willing to bid up aggressively while Figma is willing to offer down aggressively).

Whether the government saw Adobe's willingness to overpay for Figma as a signal of Adobe's underlying incentives (as in "I acquire Figma to keep my monopoly" and not "I acquire Figma to vertically integrate and make better product for consumer") seems much harder to speculate on. I didn't explain (nor do I think there's an obvious explanation) for why the original deal was at the high price rather than the low price, but I'd imagine Figma would've been generally willing to sell for less than the price Adobe bid given Adobe was probably Figma's best customer for acquiry.

But high IPO prices is evidence against the idea that Adobe was willing to overpay for Figma due to downside risk to Adobe that is not matched by upside benefit to Figma!

Obviously the die game is a simplified stylized example. Yes, I agree, that chance that Figma stock was worth literally zero (above what was paid) was less than 50%. But the point is that there was obviously risk that Figma would be worth less than $20B, otherwise Figma wouldn't have wanted to take the deal.

I think the flaw here would be to assume that there's such a great chance (roll 1 -3) of it being worthless. Figma, while not being a mature 20+ year old company, had long since established its place in the market.

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