MariaDB plunges nearly 40% in NYSE debut after SPAC merger

https://www.bizjournals.com/sanjose/news/2022/12/19/mariadb-goes-public-in-spac-merger.html

by highclass • 4 years ago

191 117 4 years ago

"About 99% of the shareholders of special purpose acquisition company Angel Pond got their money back before the merger was completed, wiping out about nearly $263 million in capital that the companies had projected could be raised in the deal."

netman21• 4 years ago

That's my problem with SPACs. The people who put them together walk away with all the money. IronNet, 23andMe, and Adstra, had similar drops.

exogeny• 4 years ago

I think the bigger problem is most of the companies that go public this way are dogshit money-losers that shouldn't be public in the first place.

jmspring• 4 years ago

BlackSky, Getaround, others...

Nifty39293• 4 years ago

I don't think you should consider this a problem. They are providing a service for OTHER people who want to invest. Effectively, they are selling picks and shovels to people who want to mine gold. Barring SEC regs, it's not up to the "people who put them together" to judge whether or not the investment is a good one. The people who want to invest do, and take their chances.

dan-robertson2• 4 years ago

Don’t the shareholders get their money back with interest if they don’t like the deal? I thought the way a SPAC works was roughly:

- sponsors create a spac selling shares+warrants for, say, $10

- they have two years to merge with a company

- when the merger is sorted, shareholders can choose either (a) to get their money back + 3%, (b) to get their share in the resulting company and discard their warrant, or (c) to get their share and exercise their warrant to buy another share at some potentially good price

- the sponsors get 20% of the pre-warrant equity in the spac’s investment. I think they might have a long lock-out period before they can sell too

- if no merger happens, investors get back their money with interest.

So maybe I don’t understand what you mean, or maybe I don’t understand what a spac is, but isn’t it bad for the sponsors if the shareholders don’t like the merger? Maybe it’s more subtle and it is a lot worse than coming up with a good merger but still better than not doing the spac at all.

berkle4455• 4 years ago

SPACs are setup by people who couldn’t figure out how to launch a DAO token scam.

Amfy2• 4 years ago

I tend to agree lol

tofuahdude• 4 years ago

Or is it the other way around?

Sebguer• 4 years ago

definitely the other way around, SPACs require up-front capital and a lot more connections!

spamizbad• 4 years ago

Nah, SPACs are just the luxury version of a DAO token scams.

dylan604• 4 years ago

Just wait, the next thing will be major announcements for the release of NFTs that'll be super hero level SQL commands.

rchaud2• 4 years ago

The grand-daddy of them all is the ICO.

codehalo• 4 years ago

That got its roots from the IPO. I hope you are not putting IPOs on some type of infallible pedestal.

danrocks• 4 years ago

People like Chamath Palihapitiya, who can probably do both. All while lecturing us about how bad our society is and how he's ashamed of having been part of Facebook (I'm sure he'll say the same about SPACs later).

blitzar• 4 years ago

who can probably do both

he can probably do neither

cheriot4• 4 years ago

We need a better mechanism for companies to go public. The traditional IPO is a ripoff and SPACS are scams. It's great that companies like MariaDB are able to raise money in public markets, though.

smabie• 4 years ago

Direct listings seem fine-ish.

arcticbull• 4 years ago

Especially since companies can, as of recently, issue new shares to sell as part of the listing (like they would in an IPO) instead of relying on insiders to provide the liquidity.

bombcar2• 4 years ago

The reason they're rare is that the people involved prefer the ripoff (or the scam, if the ripoff won't work).

Direct listing is most logical and if done right, the company will get the most of actual benefit.

jasmer2• 4 years ago

That's a bit '-ish'.

The bar is too high and there are huge numbers of really decent companies that need some kind of liquidity.

We're just not set up for it. Maybe it's a matter of just bringing more attention to small caps, I don't know.

Or another vehicle.

There are just too many truly great value creating business out there whereupon it's very difficult for founders to get their accumulated value out of it. People have devoted their lives to doing some good thing, but it's pointless if it's hard to market the company. This absolutely has effects on the industry because it's literally not worth the devotion required to do so many things if there can be no upuside even a good scenario of making a decent company.

It leaves way too much money in the hands of bankers and speculators and not those to took the biggest risks, made it work and likely created surpluses for everyone.

Definitely we need a new model.

cheriot4• 4 years ago

I read somewhere that they end up costing as much as an IPO for some arcane reasons. Maybe that's not actually the case?

TylerE5• 4 years ago

We need a better mechanism than going public.

That only leads to the inevitable next-quarter-itis that has taken down once great companies like HP and Bell Labs.

Nifty39293• 4 years ago

Don't forget that things are the way they are for good reasons, or at least historically good reasons. At least with next-quarter-itis you're holding execs accountable for delivering _something_ relatively soon. It's an imperfect check-and-balance.

Are you excited by the fact that Mark Z doesn't suffer from this disease with Meta and is spending $25B/yr on a virtual reality platform that won't provide returns for many years, if at all?

Quarterly reporting (and the inevitable over-weighting of it) is there to PROTECT small-time investors.

cheriot4• 4 years ago

My impression is that the incentives leading to "next-quarter-itis" are primarily executive compensation and investor's own timelines (influenced by long term cap gains only requiring one year).

Keeping companies private just limits who can own them and doesn't help.

samtho2• 4 years ago

We need a new exchange that focuses on driving profits for shareholders over a longer term especially ones with wider goals. I think there is a market desire for companies that have positive social or public goals but still make sense organized as a for-profit. What we might get is less pan-flash/hyper-growth-startup-IPO and more organically grown companies with a certain amount of staying power and positive social or public goals.

Our current model of “must have quarter over quarter growth” is a good a check in theory but it’s too easy to cut corners in the short term instead of solving systemic, organizational problems which just kicks the can down the road.

snarf21• 4 years ago

We need a law that says that CEOs and C-suite writ large and board members can't receive stock/options/RSU. Otherwise, we'll always be stuck in Goodhart's law. Maybe they make enough already and don't need bonuses. The "bonus" is keeping your job not getting a golden parachute.

dan-robertson2• 4 years ago

IPOs feel like more of a rip-off if you have easy access to private money and so don’t really need to IPO to raise more. Maybe there won’t be as much easy private money going forwards and raising from public markets will look more attractive.

I’m also not very convinced that IPOs are a rip-off FWIW.

andreareina• 4 years ago

A company is always free to do a direct listing.

0xbadc0de5• 4 years ago

The corpse of MySQL just can't catch a break.

pram• 4 years ago

MySQL is safely entombed within a gilded Oracle mausoleum.

bink• 4 years ago

I often hear whimpering when I fly too close to Lanai.

sanjayio2• 4 years ago

The corpse? It's actively used by many companies in production. Unless you're referring to the branching point, which is more like the younger version than a corpse.

ralph84• 4 years ago

It's actively used by many companies in production

The problem is not many of them want to pay for it. $40 million in ARR after 13 years and $227 million in funding isn't great.

selfhoster11• 4 years ago

We use it in production. It’s a corpse, all right. The only reason we haven’t gone Postgres is because our codebase is extremely extensive and dependent on MySQL/Maria.

jaboutboul• 4 years ago

Hopefully SPACs are cooked after this and the other recent bad SPAC news.

bfeynman• 4 years ago

SPACs have been cooked since last year. The fact people are still doing it now during the worst time to make any public offering shows that they are completely out of options and need to cash out.

lmm• 4 years ago

It's part of the terms of a SPAC that they have to find a deal within (usually) a year or return the money. There are hardly any new SPACs being started up, but the ones left over from the boom still have to make the best of what they've got.

Amfy2• 4 years ago

way too many IPOs & SPAC mergers recently…

albertopv• 4 years ago

I don't really know the company, how is it possible to lose so much money? It seems to me that 350 employees are too many for such low sales, maybe half, or a third or even less, could be sustainable.

adriancr• 4 years ago

It's losing incredible amounts of money... how is it possible to still have 650M market cap when you lose almost as much money as you have revenue... and next year doesn't look that much better...

strangattractor• 4 years ago

The SPAC is listed as a stock before there is really a company with a product. The value of that stock is defined by the capital put up for the SPAC. Once the SPAC merges with a real company the value of the stock is usually around whatever cash/capital put in originally.

usr1106• 4 years ago

Losing money by doing real business (or in the case of losing money: attempting to do real business) would be a real problem for employees doing hard work. Losing money in this case here is gamblers' money and I have no feeling for gamblers. Unfortunately some employees' salaries are paid by gamblers (mine is), so it can have nasty consequences.

Read the valuation of MariaDB earlier today in the paper paper (so before trading had started) and immediately thought: It can't be worth that much: Speculation, hype! Of course the new value determined by "the markets" is also a result of speculation. Just a different type of and less hype.

nly• 4 years ago

Markets are forward looking. If a company loses less money next year than it did this year then they see growth. Likewise, if a company loses more money next year than this year... well, that is growth too! Growth at all costs.

ibotty• 4 years ago

Can someone please explain what that means. I know MariaDB but understand pretty much nothing else here.

greenyoda• 4 years ago

A description of how SPACs work can be found here: https://www.investopedia.com/terms/s/spac.asp

darkwater• 4 years ago

From the link:

During a 2020–2021 boom period for SPACs, they attracted prominent names such as Goldman Sachs, Credit Suisse, and Deutsche Bank, in addition to retired or semiretired senior executives.

Now, why retired or semi-retired senior exec who are most probably already swimming in money and have a certain age are even thinking about these investments instead of just spend the fortune they have and enjoy life? I guess I'll never be such an exec...

Yhippa• 4 years ago

Is MariaDB looking for different ways of investment to achieve their corporate goals?

noncoml2• 4 years ago

An example that you don't have to just be smart and hardworking in order to succeed in business. You need to be lucky as well. MySQL was the right product at the right time.

Edit: Forgot the "just to be smart and hardworking"

ergonaught• 4 years ago

I assure you that MySQL-the-company was absolutely filled with very smart and very hardworking people.

noncoml2• 4 years ago

Sorry, my bad. I forgot to the "just". You don't have to just be smart and hardworking.

Havoc• 4 years ago

Not quite following why MariaDB is even a listed company? It's a solid database sure but traditional relational DB isn't exactly a bleeding edge killer feature these days

What was the intended differentiating hook?

jamesfinlayson3• 4 years ago

I agree - I didn't realise it was a listed company. Does it compete with Oracle or SQL Server in terms of features?

seabrookmx• 4 years ago

Absolutely not. It's main feature is being wire compatible with mysql.

mdaniel• 4 years ago

My recollection is that it was created when Oracle took over MySQL in order to continue to have a community-driven GPLv2 "mysql compatible" server; I was expecting them to be more different than they are, but for comparison one is a "clean" GPLv2" and the other has more words and a link to oracle.com: https://github.com/mysql/mysql-server/blob/mysql-8.0.31/LICE... https://github.com/MariaDB/server/blob/mariadb-10.11.1/COPYI...

chillfox• 4 years ago

It’s just a fork of mysql.

bloodyplonker22• 4 years ago

They were listed because the shareholders wanted liquidity and they didn't want to pay more to do it the "legitimate way", which is an IPO or direct listing.

randyrand2• 4 years ago

Because going public is the only way for most shareholders (including most employees) to sell shares.

Don’t ask me why startups are designed this way.

It’s dumb.

edgyquant• 4 years ago

I had no idea Mariadb was a startup. I thought it was an open source fork if mysql

Mistletoe2• 4 years ago

Does anyone have info on what price early investors got the shares?

Retail launches are always designed to let them cash out with big multiples no matter what the price does.

I remember buying something I thought was “early” for $5 a share and later we learned the real earlies got in for $0.25. I was able to sell somehow at a price of $12 in the mania after it launched, but of course it eventually bled out down to $0.25 and beyond because of the constant selling from the insiders. They were always in profit, what did they care?

Rastonbury• 4 years ago

Companies don't have to be bleeding edge to list, owners might want to raise capital or exit, then they just have to meet exchange requirements

tmpburning• 4 years ago

Why is MariaDB on the stock market?

joshe• 4 years ago

Here's an even more dramatic one, https://www.google.com/finance/quote/GETR:NYSE?sa=X&ved=2ahU...

$10 a share to $0.96 in 2 weeks, 90% loss.

Jedd2• 4 years ago

MariaDB's eponymously named open-source software ...

I'm sure they meant 'eponymous open-sourced', as named is implicit in the meaning of that word, but I'm less confident whether an eponym can be granted based on a familial naming attribution?

A few years ago I had a weird exchange with someone on these forums who enlightened me about the maxscale licence change, and identified this as a key turning point (not in a good way) for the MariaDB community's shift in attitude. [0]

I grew up with MySQL, even met Monty one time at a London meetup, moved to MariaDB at the appropriate time (around when Debian switched over), but have since embraced the joy of PostgreSQL (mostly because that's what we use at work). Not that PostgreSQL is without architecture / licensing complexities on the HA front.

[0] https://www.infoworld.com/article/3109213/open-source-uproar...

seanhunter• 4 years ago

They’re saying the database has the same name as the company, not anything to do with the familial naming connection.

satvikpendem• 4 years ago

That's what eponym means, hence what the grandparent said.

Jedd2• 4 years ago

Ah, that's what they were comparing - thanks, I missed that entirely. Given My and Maria are his kids names I'd jumped to that interpretation.

ergocoder• 4 years ago

Is plunging 40% bad? Square, Paypal, and etc. decreased way more than that.

pengaru• 4 years ago

FTR in 2018 MariaDB Corporation acquired Clustrix, it's not just the MySQL fork under this corporation.

MariaDB plunges nearly 40% in NYSE debut after SPAC merger

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