Computer Graphics 7
When Edoba named its price, every investor agreed to sell.
But Adeo Belde held 52 percent of Pagma's shares. Even if every other investor sold, it would all be meaningless if he refused.
So the investors went to him and tried to persuade him that the company should be sold.
The very people who had helped Pagma grow until now had, in an instant, all switched to Edoba's side.
This was probably one of Edoba's acquisition strategies too.
As long as Pagma kept growing, it might survive. If it didn't, though, he would be taking the full force of the investors' outrage.
Could Pagma really keep growing the way it was now?
It was hardly unusual for a hot startup to collapse overnight. If Edoba decided to apply real pressure, there was no telling what would happen to Pagma.
Adeo thought it over for several days.
After working until dawn and then returning to his studio apartment, he saw his girlfriend curled up asleep on the sofa.
She must have spent the night watching the baby alone until exhaustion finally dragged her under, because the infant was lying in the cradle beside her.
The baby looked up at him and opened its mouth. Its teeth had already come in.
At that moment, Adeo made up his mind and sent the email right then and there.
I accept the offer.
After checking the mail, CEO Shiravan Shuri smiled.
"Well, of course."
Silicon Valley was full of young founders.
They all claimed they were chasing dreams, not money. But very few people could stand firm before a fortune that large.
If someone didn't flinch, then the offer was probably too small.
Edoba had grown through mergers and acquisitions. Some people got excited when an acquisition was proposed, but others lashed out, asking, "You're trying to buy my company with money?" or "Are you insulting me?"
And yet even the ones who scoffed at a large sum would kneel before a bigger one.
Raise the offer high enough, and they'd smile and shake hands as though nothing had happened.
This time was no different.
They may refuse 10 billion dollars, but they won't refuse 20 billion.
The acquisition deal moved ahead immediately.
Under the lawyers' supervision, CEO Shiravan Shuri, Adeo, and the representatives sent by the VC reviewed the documents.
The representatives all signed at once.
But Adeo held the pen in his hand and hesitated until the very last moment.
CEO Shiravan Shuri smiled and said, "Go on and sign. The moment you do, you'll be insanely rich."
In the end, he signed the paperwork.
With that, Edoba acquired every right to Pagma. The $20 billion purchase price would be paid in cash.
Adeo gave a bitter smile.
"Maybe I'll regret this someday."
At that, CEO Shiravan Shuri broke into loud laughter.
"Not a chance. You'll probably think it was the best decision of your life."
Adeo answered with quiet self-mockery.
"I really hope so."
The news of Edoba's acquisition of Pagma sent the market into immediate turmoil.
The purchase price was a staggering $20 billion.
That was a sum equal to one-tenth of Edoba's market cap, making it the largest merger and acquisition deal in the company's history.
The market was stunned.
CEO Shiravan Shuri said Edoba and Pagma's software would be run separately for the time being, but consumers were deeply uneasy.
After the acquisition was announced, Edoba's stock fell 17.65 percent on the New York Stock Exchange.
Analysts pointed out that the profits Edoba could gain from acquiring Pagma were not especially large.
But CEO Shiravan Shuri saw things very differently.
Pagma was absolutely worth that price. More than that, by acquiring Pagma, Edoba had taken control of both the paid and free sides of the graphics software market.
$20 billion might be expensive as the cost of acquiring a single company. But if it meant preventing a second Pagma from ever appearing, then it was cheap enough.
Now there's no one left who can threaten Edoba.
As it always had, the graphics software market would continue to be Edoba's own private stage. Once you controlled the market, profits would follow on their own.
CEO Shiravan Shuri was already thinking about upgrading the software and adjusting the prices in the future.
But then...
A situation he had never imagined unfolded.
Blackwood International's Black Forest app and Legend Games' Legend Games Store were two representative examples of what Snow Crash had already built for other companies.
But this time, it had released a direct-to-consumer B2C program of its own.
Narfi was the name of Loki's son, and because the program had been derived from the CG creation software Loki, that was the name they gave it.
It was similar to Pagma in that it ran in a web browser and supported simultaneous collaboration, so users didn't need to install an app.
Once you logged in, you could do everything there: graphic tools, visual design, Photoshop, Illustrator, video editing, graphic effects, and more.
The difference was the overwhelming performance.
Phil Cantrell, who was in charge of development, said confidently, "Because Narfi uses Snow Crash's AI program Mimir, anyone can edit photos and videos with ease."
The most important fact was that the program was free.
You had to pay to use the premium features, but the basic functions were all available at no cost.
Designers who participated in the beta test praised Narfi's performance to the skies.
"It's way easier and more convenient to use than Pagma, and even better than Edoba."
"At this level, even beginners could handle it."
"The video editing is about on par with Edoba's Pro Premium, but it's free."
"They're saying the standard version will be released for free."
"Isn't this the one we should all be using from now on?"
Experts did not switch programs easily.
The software they already used would also be integrated with Edoba's products, so changing right away would be difficult.
But ordinary users moved to better programs without hesitation.
Wall Street analysts named Pagma as the company that would suffer the most from Narfi.
Once the program was actually released, Pagma would fall like a bird with its wings cut off. Under normal circumstances, that loss would have fallen on the founder, Adeo Belde, and the investors.
But Edoba had acquired the company.
In other words, Edoba had paid a massive sum to acquire a company it had never needed in the first place.
One analyst called it "a stupid acquisition comparable to Enple's Yokohama acquisition."
Edoba went into emergency mode.
CEO Shiravan Shuri called an emergency meeting and gathered the executives and team leaders.
"What the hell happened? Did nobody see this coming?"
None of the people in the room answered, and in truth, he hadn't seen it coming either.
The CG creation power of Loki was obvious enough from the videos they had already released. But using it as a graphics program was a completely different matter.
And yet they made it this easy?
In one sense, the two fields were entirely separate.
If this had really been that simple, CG companies would have entered this market long ago. Instead, Snow Crash had made it look effortless.
"It seems they must have had this in mind from the development stage," someone said.
"The performance is far superior to our program."
"At this rate, even our paying users could start drifting over there."
Edoba had spent decades building up its know-how in graphics software. That expertise was one of the company's greatest assets.
And now it looked as if it might be overtaken overnight.
"So what's the plan? How do we keep Snow Crash from stealing our customers?"
No one answered.
CEO Shiravan Shuri let out a dry laugh.
"Are you telling me our thousands of developers are worse than a single Sid Lucas?"
One man had shaken Edoba, a giant corporation, to its core.
"What about buying Narfi?"
Buying Snow Crash itself was impossible, but maybe the program alone could be purchased.
But everyone shook their heads.
"Since it uses the AI program Mimir, I doubt they can sell it separately."
"And it's not as if Snow Crash is ever going to run out of money."
"Besides, after spending all our cash on the Pagma acquisition, we don't have room for another purchase right now."
CEO Shiravan Shuri was speechless.
They had used all their available cash to buy out a rival, only for an even more powerful competitor to appear.
They'd thought they had gotten rid of the wolf, only to find a lion waiting in its place.
If he had known such a program was coming, he never would have bought Pagma, even at a bargain price.
CEO Shiravan Shuri was stunned.
If only the launch had come a week earlier...
Then he could have stopped the acquisition negotiations immediately, or driven the price down to less than half.
If the negotiations had still been underway, he would have broken them off on the spot. But the contract had already been signed.
As things stood, $20 billion was about to vanish into thin air.
We're finished...
As soon as the meeting was over, CEO Shiravan Shuri called Adeo at once.
"What is it?"
"I have something to discuss about the Pagma acquisition."
"That matter is already over, isn't it? Just make sure the sale proceeds are paid on schedule."
"That's not the issue..."
"Ah! You were right back then."
"Huh?"
"Didn't you say the day I signed was the best decision of my life? You were right."
"..."
"I'm on vacation with my family right now, so if you have anything else to say, please talk to the lawyer. Now, if you'll excuse me."
Adeo hung up.
After sitting in silence for a while, CEO Shiravan Shuri grabbed the receiver and hurled it away.
"What the hell!"
The reason Edoba had been able to receive such a high valuation relative to its sales and profits all this time was that it was a monopoly.
The graphics software market was not an easy place for other companies to enter, and even when users complained about prices or service, they rarely left.
That was why the user base kept growing even as prices were raised again and again.
But the moment Snow Crash entered the market, Edoba's monopoly was broken completely.
Revenue had not fallen immediately, but damage in the future was unavoidable.
Institutions sold in unison, dragging the stock down, and Edoba's market cap shrank to $100 billion.
The stock price crashed to less than half of its peak, and in the end, CEO Shiravan Shuri resigned, taking responsibility for it all.