This is, by the way, a problem I see with a lot of public policy - in a market system, what's good for companies is not necessarily what's good for the system.

Steve Eisman puts this well in [1] when talking about why he's investing in bank stocks even though he thinks prospective rollbacks in Dodd-Frank reforms are a bad idea: "There's two issues. There's what I think about the financial system and what I think about financial stocks, and the two don't necessarily correlate."

[1] https://youtu.be/NJodqhzqPKQ?t=4m10s

I liked the Steve Eisman character from The Big Short, but I was disappointed his prediction bank stocks would do well didn't play out.

  KBE:   44.49 Jan 30, 2017, 47.82 July 11, 2018 = 7.48% price growth (I couldn't find numbers for total return and too lazy to compute from distribution history)
  VFAIX: 20123 Jan 30, 2017, 23569 July 11, 2018 = 17.1% total return
  VFIAX: 22291 Jan 30, 2017, 27729 July 11, 2018 = 24.4% total return

  KBE:   SPDR Bank ETF
  VFAIX: Vanguard Financial Index
  VFIAX: Vanguard S&P 500

KBE total return is about 12.8% (42.70 to 48.19) based on http://stockcharts.com/freecharts/perf.php?KBE,VFAIX,VFIAX (those numbers are adjusted based on distributions and splits)

I find that super interesting - especially since they seem to have underperformed the 500 even after the deregulation bill passed in March.

I've seen this sort of justification of Blockbuster's demise before, but it's hard to buy.

I mean, sure, the business model and support systems between original Netflix and video rental store are fairly different, but Blockbuster still had a huge leg up over starting from scratch. They already had vast inventories, sorting systems, a distribution network (albeit one that would have to be heavily modified), name recognition in a market that consumers considered interchangeable (common consumers just think "video rental", not "brick-and-mortar retail vs. online direct delivery") and I assume a lot of production industry connections and relationships.

It seems like they were already over halfway there, and given that the biggest hurdle is getting off the ground, their existing brand recognition and membership records are a massive advantage.

I’ve been an employee in a buyout twice by a company that didn’t get it. One of those times they thought they did, but they still crushed us anyway. It was hard to watch. Especially from a front row seat. :/. I’ve worked at two places a year or two after the buyout. Not as real for me but my coworkers were clearly frustrated.

For a while I was pretty sure I knew what a healthy buyout should look like. Now I’ve no idea. How do people pull this off?

Cisco seems to do this well. And sometimes poorly. The screwed up on the consumer products space. But they regularly succeed with enterprise hardware solutions. If they can add something their global field team can sell and support, they succeed. The leverage of their sales pipelines exceed what the acquired business could do organically in any meaningful timeframe. They have a teams of entrepreneurs that have been acquired, then left to start something new again, and then been purchased more. I think the key thing is that there isn't a fundamental disconnect. Even blockbuster did well with aligned "bolt-on" acquisitions of regional chains during its growth phase.