From PayPal buying Honey to Morgan Stanley acquiring E*Trade to most recently Intuit getting Credit Karma, what do you think about all of these fintech acquisitions? Do you see more fintech being bought out?
Big Fish eating Small Fish. The classic rule of the nature. Happened in the past within oil industry in 20th century. Happened in early 21st with Google and Facebook eating small threats. Now, it's time for Fintech to see same phenomenon.
Visa bought Plaid too
They are buying when their stock is inflated :) good decision if you ask me if they are paying in stock
PayPal & Honey deal was all cash tho
The fintech acquisition landscape is evolving quickly. The big players want to stay ahead of the curve and in most cases here the real opportunities are not available via organic growth / much more compelling in an M&A context. Will be very interesting to see how the ETrade acquisition plays out for MS. Will certainly result in a renewed focus on that side of their business
Buyers overpaid across the board. Great time to sell, but hard to justify those multiples in a down market.
Well, to take a step further than folks on this thread. Take a look at the revenue models of these two examples (I.e. Honey and Credit Karma) they’re both companies that operate with a consumer facing service with an affiliate based revenue model. The value that both these businesses bring to driving top of the funnel for their acquirers is tremendously valuable. I think it’s easy to say on face value that they may have overpaid (maybe so) but it’s hard to quantify particularly with a company like Honey which is likely growing like crazy at scale.
Fast growth yes but still not worth 30x rev.
Large banks and financial companies are completely crushed by regulations. It is really hard for them to think outside the box and do some innovative products. Especially with all the money they invested in their legacy tech systems impossible to upgrade. Hence it is way easier for them to invest in fintech are try to integrate their technology and spirit for their core business. It is also a good way for them to diversify their income. In my opinion this is more image related and won't have a strong impact on these firms
They are all lame acquisitions, from bad to monopolistic.
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You forgot schwab buying TD, which I think is the dumbest. Hopefully they keep thinkorswim alive