MariaDB plunges nearly 40% in NYSE debut after SPAC merger
bizjournals.comNot 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?
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.
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?
I had no idea Mariadb was a startup. I thought it was an open source fork if mysql
MySQL is named after the founder’s daughter—My ( pronounced me by the way ). He sold it to Oracle and then, because it was Open Source, he forked it to create MariaDB. The name of his other daughter is Maria.
Wait what? The same guy who made MySQL sold it to Oracle, then forked THAT code, started a new company on the same codebase then now is going public?
It's not pronounced Me, it's not English. But let's excuse your americanism.
No one I know had ever pronounced it Me. How did you come to the conclusion this non existent thing was an Americanism?
I think the reference is to the daughter's name, not the product. Previous discussion regarding name:
Ah. I thought the OP was saying "Americans pronounce it 'me' and that is wrong".
They were saying "Americans pronounce it 'my' and that is wrong".
Got it.
It's neither. I'm saying you're too dumb to understand that your language doesn't cover every other language.
Many open source projects have startups behind them putting in all the work, usually with the hope of monetizing it. Which is a really hard problem - the choices are support and services (the software is FOSS but you sell support and implementation/review services to enterprises - what Red Hat used to do), or open core (only the core software is FOSS, and there are proprietary Enterprise versions with more Enterprise features). Neither are obvious and many open source startups fail.
I agree - I didn't realise it was a listed company. Does it compete with Oracle or SQL Server in terms of features?
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...
Absolutely not. It's main feature is being wire compatible with mysql.
It’s just a fork of mysql.
but an incompatible fork. There are many major differences between MySQL and MariaDB. https://mariadb.com/database-topics/mariadb-vs-mysql/
It wasn't an incompatible fork at first. It's now diverged a bit.
Yeah that was my recollection. I thought putting a company behind it might have changed that but apparently not.
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.
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
SPACs are setup by people who couldn’t figure out how to launch a DAO token scam.
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).
> who can probably do both
he can probably do neither
Nah, SPACs are just the luxury version of a DAO token scams.
Or is it the other way around?
definitely the other way around, SPACs require up-front capital and a lot more connections!
The grand-daddy of them all is the ICO.
That got its roots from the IPO. I hope you are not putting IPOs on some type of infallible pedestal.
Yes but presumably IPOs have a business model and assets, quantified by audited financials that can be examined and evaluated against competitors.
ICOs were taking real money and exchanging it for tokens with no legally enforceable equity rights. It's GoFundme with a slicker landing page, but no oversight whatsoever. There's a reason they do that and it's not because doing it through the proper channels is impossibly onerous.
I tend to agree lol
Just wait, the next thing will be major announcements for the release of NFTs that'll be super hero level SQL commands.
"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."
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.
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.
Your understanding of SPACs is correct. However sketchy sponsors might have short vesting periods.
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.
All SPACs, and some traditional IPOs, are a last ditch effort of dumping worthless equity onto naive retail investors.
The fact that some recover and become "real companies" doesn't detract from this. Beware the IPO and the SPAC.
> The company in February projected an operating loss of $43.2 million this fiscal year on sales of $47.4 million and an operating loss of $44.7 million in fiscal 2023 on sales of $63.5 million.
Nice stats haha.
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.
BlackSky, Getaround, others...
SoFi (IPOE) too.
> 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...
They’re saying the database has the same name as the company, not anything to do with the familial naming connection.
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.
That's what eponym means, hence what the grandparent said.
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.
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.
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.
As you said, the relationship between shareholders and the C-suite is a check-and-balance.
Meta's structure basically makes Zuckerberg unoustable. He can continue to toss money into the ether chasing a particularly bad idea.
Conversely, it's possible to have voting power so diluted that nobody who has a long-term vision has any way to promote it.
Broad ownership allows people to call bullshit, but maybe something like a capital-gains surtax on shares held less than 5 years would make it too expensive to dive-bomb into a company just long enough to sabotage its long-term future.
"capital-gains surtax"
In the United States we have "long-term gains" which are taxed preferentially at much lower rates. How about we just stop doing that.
Also for carried interest.
Also also the "never mind about those taxes at all" stepped-up basis for your heirs when you die.
All of these things simply distort the overall market as people modify their plans to account for these tax breaks.
If you don't like to see higher taxes, then replace these distorting, selective tax-breaks with lower overall rates to make up the difference. Or if you like higher taxes then don't do that.
But for gosh sakes can't we please get rid of these behavior-distorting tax laws?
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.
Wonder if something like a one year lock in period would work.
The fundamental change seems to have been circa 1960’or so, when stocks went from being things that earned a dividend - and the dividend is where most of the return came from, to most companies reducing and then stopping dividends altogether.
How does the exchange shares are trade on impact the incentives for management and shareholders? ltse.com has never made sense to me.
I would say that remains to be seen. I think the goal is to ultimately asking incentives to longer term views instead of quarterly ones, which may end up taking a different form down the road.
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.
Why do we need a law telling private holders of equity how they can or can't distribute that equity as incentives?
If shareholders think the C-suite and/or board are overcompensated, they can vote for a different decision. And if they don't have the majority to get their way they can sell, buying into a company that better reflects their priorities.
I'm not sure I see the case for further regulation of what are, essentially, private decisions and transactions.
Not giving management of a company shares is a very bad idea. A company's soul purpose is to serve its shareholders and to keep management and the shareholders on the same page, management should be given shares in the company.
https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...
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.
Direct listings seem fine-ish.
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.
The bar for direct listings is not because of the model its because of the costs to go public and be public. Small cap stocks are not what they used to be, and it seems like some process for reducing regulation on small cap stocks seems like it would benefit everyone.
The very high bar for IPO (aka sarbanes-oxley, layers, bankers) is part of the 'model'.
Aside from expenses, there is a kind of 'stock populism' - big stocks get a lot of noise, which is a form of demand gen for the stock.
Companies with popular CEO's get a huge boost for example.
Both retail and bigger investors tend to prefer the bigger stocks.
This is part of the model which might possibly be improved.
We could adjust the taxation rules maybe, or, change listing rules, or literally just convince the banks that there is a huge opportunity in smallcap that's overlooked.
There are 100x mid-sized business opportunities for every big one - I see them literally every day.
I have told countless entrepreneurs that they have great businesses that are not suitable for VC because the growth and market is not there. And then what?
It's more economically efficient for them to nerd-out and compete for a 'Google Job' because they have all the power in the system.
Indirectly - there may be a bit opportunity with scale and regionality.
Large brands get a natural advantage in advertising as well, which doesn't work well for little regional shops.
I just bought a pair of winter boots on the high street out my door but totally by fluke - the are too small of an op to compete online.
There might be some taxation or international regs that we might want to put in place.
Perhaps I'm suggesting a bunch of adjustments that streamline financing for SMB and recognize the disproportionate power of conglomerates that it not always economically efficient. Often it is, but not always.
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.
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.
I read somewhere that they end up costing as much as an IPO for some arcane reasons. Maybe that's not actually the case?
It’s not the reason. They’re SPACing because they’d never pass the scrutiny to IPO
who did the Spac pass the crusting then?
Because it’s just a bag of money.
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.
A company is always free to do a direct listing.
Can someone please explain what that means. I know MariaDB but understand pretty much nothing else here.
A description of how SPACs work can be found here: https://www.investopedia.com/terms/s/spac.asp
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...
One possible reason why rich people do this, is that they like making money, which got them rich in the first place.
Liking to make money and liking to enjoy money are different traits, I suppose.
> Liking to make money and liking to enjoy money are different traits, I suppose.
I get that. My dad was never that excited about making money, but he still described TurboTax as his favorite video game. Sometimes you just want to optimize the number, no matter what the number is.
It's really interesting how people can be so different, lol. One look at TurboTax and I feel deep existential dread, like it goes "deductions" to "heat death of the universe" in a few form fields.
I'm guessing they stopped only because the SEC made some rule changes that made SPACs less lucrative.
https://www.skadden.com/insights/publications/2022/03/sec-pr...
> 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?
Obsessive-compulsive disorder and self-worth insecurity that masquarades as 'success in business'.
They got that rich because for them the deal is the “juice”. They prob retired because they couldn’t invest as much time keeping up with it due to age but SPACs were such a feeding frenzy they could jump in and make a killing
Beyond a certain point (which these guys are all well past), money is just a way of keeping score.
Why would a programmer continue to program after retiring?
Hopefully SPACs are cooked after this and the other recent bad SPAC news.
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.
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.
The corpse of MySQL just can't catch a break.
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.
> 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.
I didn’t even know you could pay for it
Same here, first time I hear MariaDB has some corporation behind it, and now even IPO. I thought it is just community fork to avoid greedy Oracle. You just pull it from Linux distro repo or Docker and voila. Now I wonder is it going to end up like MySQL AB?
I don't even know why I would want to pay for it.
They sell support. Source: I was an executive there for 6 months. It was an experience.
Does the paid support help decode the useless error messages?
Yep. Definitely. Less confusion is a result of paid support.
Tell us more! Please
What would you like to know?
Is there a reason why revenue figures are so low? Considering some other db products seem to be doing fine?
What was/is impressive about MariaDB is their ability to sell to a large swath of users, from Mom&Pop shops to some of the very largest enterprises[1]. In the ServiceNow case, each customer has their own entire db and the magic is in orchestrating all of this.
Where MariaDB really shines and drives usage is around their ColumnStore[2].
Some of the downsides from a larger adoption and integration standpoint is the BSL license[3]. Relatively unknown and untested and as a result there's aversion to risk.
To get the direct answer to your question, I think a combination of the factors previously in conjunction with revenue being eroded from cloud offering their tech as a service, and SkySQL[4] not making up for the difference are serious inhibitors to revenue.
1: https://mariadb.com/resources/customer-stories/servicenow-ma...
2: https://mariadb.com/kb/en/mariadb-columnstore/
I hear you, I just mean I wouldn’t call that a corpse. It’s clearly providing utility. Similar to OSS over two decades making $0 ARR. I imagine it must’ve been hard to monetize given alternatives.
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.
MySQL is safely entombed within a gilded Oracle mausoleum.
I often hear whimpering when I fly too close to Lanai.
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...
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.
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.
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.
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.
Is plunging 40% bad? Square, Paypal, and etc. decreased way more than that.
Why is MariaDB on the stock market?
Is MariaDB looking for different ways of investment to achieve their corporate goals?
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"
I assure you that MySQL-the-company was absolutely filled with very smart and very hardworking people.
Sorry, my bad. I forgot to the "just". You don't have to just be smart and hardworking.
FTR in 2018 MariaDB Corporation acquired Clustrix, it's not just the MySQL fork under this corporation.
way too many IPOs & SPAC mergers recently…
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.