Why I'm Sticking With My Adobe Stock After the Blockbuster Figma Deal -- Warts and All

As can be expected with any blockbuster acquisition, there are a lot of varying opinions out there right now on Adobe's (ADBE -1.15%) mammoth $20 billion buyout of privately held competitor Figma. Overall, the market is unhappy. Adobe stock slumped nearly 20% since the deal was announced, equating to a market cap loss of roughly $35 billion in just 4 market days (as of this writing, Adobe is valued at $138 billion). Clearly, investors think something is amiss.

While I plan on holding on to my small position in Adobe, for now, I'm doing so begrudgingly. Adobe has nothing short of an empire built in the fields of digital content creation and management software, but it may have underestimated the ability of tiny upstarts to disrupt it. A $20 billion price tag is proof of this error.

Adobe may not be the company we thought it was

For many years, investors have praised Adobe for its defensible moat -- its big lead in creative software and document management that peers can't crack. I own some Adobe stock because I admire how deeply embedded it is in the creative world and its steady double-digit percentage growth over the course of decades.

But technology is a tricky business. I don't really believe there are many true defensible moats in software and computing technology. Tech is all about continuous improvement, a strategy of playing business offense -- not playing defense.