Hostile Public Offer Playbook

Walk someone through how to identify and acquire undervalued public companies using the public offer strategy — combining Justin Yoshimura’s CSC Generation playbook with Suli Ali’s Squarespace thesis, both discussed on My First Million.

When to Use

The user is thinking about acquiring a public company, making an unsolicited offer, or identifying undervalued public companies as investment or acquisition targets. They might say:

• “I want to buy a public company — how does that even work?”
• “There’s a public company I think is undervalued and mismanaged — how do I take it private?”
• “How do hostile takeovers actually work?”
• “What’s the CSC Generation strategy?”
• “I want to do what Elon Musk did with Twitter”
• “How do activist investors force companies to sell?”

The Core Principle

From Shaan Puri (F-McXK-60BI.md), describing Justin Yoshimura’s strategy:

“He’s trying to build what Constellation Software did for small SaaS companies but for large furniture companies. Constellation built an amazing intake engine to buy like 30 software companies a year and unlock more value from them. He’s trying to do the same with furniture.”

And from Suli Ali:

“Starting a new company from scratch is really hard, so I’ve been wondering: is there a public company I can acquire, where I don’t go through that zero-to-one phase that everybody loves but is really difficult? Something already at a five or ten, and I can take it from there?”

The insight: public markets misprice operating companies all the time. A company that was worth $10 billion in the private market may trade as a $3 billion public company if it’s poorly managed or in an out-of-favor sector. The gap between intrinsic value and market price is the opportunity — if you can close it.

Step 1: Identify the Target Profile

The ideal target for a hostile or semi-hostile public offer has:

The Squarespace thesis (Suli Ali):

“To me, the perfect business to acquire right now is a company that was worth $10 billion in the private market and is currently a $3 billion public company… The stock is down about 50% since the IPO. They’re at a $900 million revenue run rate. It’s a subscription business with more than four million subscribers.”

Key characteristics:

• Subscription or recurring revenue — predictable cash flows, defensible
• IPO price vs. current price divergence — suggests market has punished mismanagement, not business deterioration
• Identifiable operational fixes — the gap between current performance and potential is specific and actionable
• Fat cost structure — HQ in an expensive city, high headcount, inefficient marketing spend

Suli Ali’s Squarespace diagnosis:

“It’s not being run to maximize profits — it’s being run in a way that keeps it at break even. I think you could run it to maximize profits. Get rid of those podcast ads, focus on direct response Facebook ads to get new customers. They do $300 or $400 million in marketing spend. That could be made way more efficient. And I think they’ve got a ton more people than they need — headcount costs are like $225 million a year, headquarters is in New York City. You could cut that team materially and get rid of the New York headquarters.”

Ask the user: What public company do you think is mismanaged? Walk through: (1) What was the peak private or IPO valuation? (2) What is it trading at today? (3) What specific operational changes would you make? Be concrete.

Step 2: Make the Private Offer First

Before going public, make a direct private approach to the board. This is legally required to be taken seriously, and it gives the company a chance to respond before you escalate.

Shaan Puri on how CSC Generation operated:

“He’d go to them privately — they’re in Nebraska, they’re 65 years old, the father’s father built this furniture store — and they’re like, ‘No, we don’t want your kind here.’”

If the private offer is rejected or ignored, then escalate to the public offer.

Ask the user: Do you have any existing relationship with board members, major shareholders, or management at the target? A warm private approach is always preferable to a cold public one.

Step 3: Execute the Public Offer

When the private approach fails, go public with a formal offer — at a material premium to the current share price.

Suli Ali on how the process works:

“You first make a private offer, then you make a public offer, and you make sure all your financing is lined up when you do. The way US stock market law works is that the board has to respond to that offer and they have to have a really good reason not to take it if it’s at a material premium to the current stock price — otherwise they’re going to get sued by shareholders.”

Shaan Puri on how CSC Generation executed it:

“He just started releasing press releases saying: ‘I’d like to buy this company for 20 to 30% over the public share price. You’ve not responded to my private offer. Your shareholders deserve this.’”

Three things make the public offer powerful:

1. Shareholder pressure — shareholders who see a 20-30% premium and a board rejecting it will get angry and vocal
2. Media attention — public companies hate bad press; a spurned offer creates a story
3. Legal obligation — boards have fiduciary duties; rejecting a fair offer without clear justification creates liability

Critical requirement: Have financing lined up before you go public. An offer without committed financing is a bluff and experienced boards will call it.

Step 4: Build Your Operating Thesis

The public offer is only credible if you can articulate why you’re the right owner. This is not just a financial bet — it’s an operating thesis.

Shaan Puri on what CSC Generation’s thesis actually was:

“He goes: ‘I have no desire to have my own brand. Constellation Software has no brand — they’re just a $40 billion company. Their stock was $100 ten years ago, it’s $2,000 now. They created a platform to buy these companies and unlock value. I don’t think anybody’s done that in retail. That’s what we want to become.’”

And the specific operational edge:

“These companies have years of customer purchasing data but it’s in a machine that’s like 20 years old — they can’t extract it into an email database or put it into Facebook ads. He’s built a system for this.”

Suli Ali’s reaction:

“There’s just so much unlocked value in these businesses, and he’s focused on a specific vertical. Just that focus will allow him to take the same product and sell it across a lot of different retailers, get crazy improvements in margin by combining the scale, and going after publicly traded companies that are undervalued — so good.”

Ask the user: What is your specific operational edge? What do you know how to do that current management clearly doesn’t? This is what you’ll communicate to shareholders, media, and the board.

Step 5: Model the Value Creation

Before making any offer, model the value creation explicitly:

Lever	Current State	Post-Acquisition	Value Created
Marketing efficiency	$300-400M spend on podcasts	Shift to direct response	$X reduction in CAC
Headcount	$225M/yr, NYC HQ	Reduce + relocate	$X annual savings
Profitability	Break even	Maximize for exit	$Xm EBITDA unlocked
Multiple expansion	Trading at depressed multiple	Private operator multiple	$X at exit

The math for Suli’s Squarespace thesis: at break even with $900M revenue, even a modest 10% EBITDA margin improvement on a cleaned-up cost structure creates hundreds of millions in value.

Quick Reference

Step	Action	Key Principle
1. Target selection	Find mismanaged companies trading at steep discount to peak	IPO divergence + subscription revenue + fat cost structure
2. Private offer	Approach board directly, document the approach	Always try private first
3. Public offer	Release press release at 20-30% premium	Board has fiduciary duty to respond
4. Operating thesis	Articulate exactly what you’ll do differently	Be specific and credible
5. Financing	Committed capital before going public	Unfinanced offers are bluffs

Search the Archive

grep -ri "hostile.*offer\|public.*offer\|undervalued.*public\|activist" transcripts/
grep -ri "CSC Generation\|Justin Yoshimura\|Squarespace.*acquire\|takeover" transcripts/
grep -ri "Constellation Software\|rollup.*furniture\|PE.*public" transcripts/

Output

After working through this framework, deliver:

1. Target analysis — the specific company, peak vs. current valuation, why the discount exists
2. Operating thesis — 3-5 specific things you’d do differently as the owner
3. Value creation model — lever by lever, how much value each operational change creates
4. Offer structure — private first, then public; premium needed to trigger board obligation
5. Financing roadmap — where the capital comes from before the public offer goes out

Source

Behind The Scenes of Selling My Company For Millions | Suli Ali (#410) — Shaan Puri interviews Suli Ali, January 2026.