Nothing about that article surprises me regarding G/O but there is one point that Zach makes about his transaction that he is wrong about:
"Thanks to G/O's stubborn insistence that it only wanted Quartz's assets and not the corporate entity"...
this is not stubborn it's quite common and is absolutely the right thing to do for many companies interested in another business. If they buy your entity (stock transaction) it comes with all the legal liability.
Zach probably doesn't understand how much more likely his deal was to close as an asset purchase rather than a stock purchase. A stock purchase comes with lots more diligence and legalese. If they are buying your stock they are buying all your baggage and potential legal matters, it requires a lot more work including a laundry list of representations by the seller. G/O did everyone a favor by sticking to an asset purchase and getting the deal done. that's where the positives end it seems.
> If they buy your entity (stock transaction) it comes with all the legal liability
For dying companies, most of the time it's fraudulent and illegal to create a transaction divesting the good assets from the bad debts. Why is that potential problem not an issue for a proposal to sell off everything good and leave behind an insolvent shell?
That's not how these things work. When a company sells an asset the funds go back to the company that sold that asset. So if the "seller" has debts or other obligations those still remain and proceeds from the sale would go towards satisfying those. However, in this case it sounds like the deal was largerly about the employee costs + some cash to the sellers.
I mean, this is literally what an Assignment for the Benefit of Creditors (ABC) acquisition is (or an Article 9) and the specific goal of an ABC is to allow for some semblance of the company's assets to persist unencumbered by an acquirer and without creditors having any further rights to their debts, aside from what they can claim from the proceeds of the ABC.
It's an alternative to bankruptcy that allows for the continued functioning of the business in many cases, and it absolutely leaves behind an insolvent shell. (And acquirers will go through great pains to avoid incurring "successor liability.")
I'm not sure you answered the question here though, why should that sort of transaction be legal? Is there a compelling public interest in allowing this sort of transaction?
It's a pretty common way for companies to go through bankruptcy. If the courts can identify a viable business inside the company, where the main problem is debt that it can't feasibly pay, they will allow it to proceed with business while cancelling the debt. Since the alternative is having the whole thing go under, without much chance of creditors being made whole, there is a benefit to society: some of the people keep their jobs.
He also states the corporate entity was quite valuable for complicated accounting reasons. I take that to mean he was not paid for the quite valuable thing since it wasn't transferred. After the money and assets were transferred, I take it that he eventually realized that a corporate entity has no actual value by itself, the buyout price can be anything and could have included the value of the corporate entity if he wanted, even if it wasn't transferred, and that statement was just a trick to pay him less money.
I took it to mean that the corporate entity had some favourable tax treatment (perhaps from losses in previous years, which could offset against future profits). Which indeed means the corporate entity has no value by itself, but it has some value if you can turn it back into a functioning business.
G/O either had their own tax shelters that meant they wouldn't benefit additionally from the favourable tax treatment, and/or didn't want to take the risk of assuming unknown liabilities (which Zach Seward could have known didn't exist, but would have required more DD from G/O to rule out).
I love the way he's thinking about this. I think the subscription estimates are a little optimistic and the payroll is too high but overall it makes sense.
I've had to report on users for previous media companies I have run. Using a daily number will make the overall number seem higher than the monthly total unique users.
Here is an example of one site I ran a long time ago to illustrate:
Average daily unique users: 111,000
Total unique monthly users for the same period: 2MM unique users.
I could see how the interpretation of the average daily might have someone inferring it's x 30 for a month so call it 3.3MM users during the month but the actual monthly total is lower.
I don't think there is anything wrong with reporting daily especially if it's the type of site or app where the user is likely to be there on a daily basis vs say the websites of the past two decades where half the readers only come once and the other half come 2 -10+ times.
I don’t think this is accurate. It’s usually not the company directly raising on AL. Rather it tends to be a syndicate with partners who have a connection with the company that is raising.
There are various reasons why a hot company might still have a syndicate including the syndicate lead was an early investor in the company so the founder is giving them an allocation in the subsequent rounds.
Im assuming you don’t live in NYC because if you did you would know how uncomfortable it is to be waiting for the subway with clearly (a lot of) mentally unstable people walking and yelling in circles and you or your loved ones are relatively alone just trying to use public transportation.
100% im glad they spent that money, they need MORE policing in the subways until they find a way to help the mentally ill unhomed.
I suppose it's one of the aspects of living in a free country that the mentally ill also have the right to freedom of speech even if it makes those around them uncomfortable. It's controversial to force people to take a vaccine once in awhile, I can't imagine how hard it would be to force people to take psychiatric medications every day.
I don't think the police can treat mental illness or build houses for the homeless no matter how much money you throw at them.
I mean... it's not like they solved it in any way shape or form. I only really see cops by the turnstiles which is entirely useless at doing anything about the mentally unstable.
Is not paying an option? Ran into this issue with a large software provider once but they had some actual account management negligence / weren't responsive so we used that to hang our hat on not paying and eventually they let it go.
No, because contract law is built for centuries past and lets Adobe screw you for trying this. Not sure if they do, but they definitely could.
Back when communication latency was days or weeks, allowing sticky auto-renew that ignored payment failure and asked for a lot of heads up time on a cancellation made sense. It was exploitable, but it was worth it to buffer the latency. Now we don't have the latency, so it's just exploitable, the law hasn't caught up yet, and Adobe is happy to exercise this advantage against you.
I'm curious, what exactly are the ramifications of this "contract law" in the context of Adobe subscriptions? Adobe will sue you? Are they suing large amounts of customers?
The risk-reward here is out of balance for SMB, so while we could just not pay it was more headache not to. Here is hoping for some class action. Perhaps small claims but its pretty frustrating that a company as large as Adobe has this in place.
Gym memberships, cell phone plans, utility bills, unpaid parking tickets, etc. will all report to your credit report if you miss payments. Debt, not just credit cards. A delinquent account on your account will drop it by 100-150 points immediately.
The information you provide with payment - name and address - is sufficient to add a delinquent account to your credit report, which will immediately tank it. Again, SSN is not necessary for this.
