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Amit Ghate

 
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  • Reckless Endangerment: Why The Next Fed Induced Crisis Will Be Worse Than The Last [View article]
    Very nice article. I agree completely, particularly with your conclusion: "What advice would I offer up to investors? In a market where risk aversion is a rarity, investors must be even more risk averse than usual." It's great advice though it's psychologically tough to put into practice (since it means under performing until the s&it hits the fan).
    Dec 16, 2014. 10:24 PM | Likes Like |Link to Comment
  • Insider Selling And No Path To Profitability Should Weigh On Zendesk [View article]
    I think it matters and becomes built in to employees expectations, but I didn't highlight it here because: (1) the company is running at a loss even excluding SBC and (2) the lockup selling and lack of a path to profitability are the biggest concerns going forward IMO. That and the fact that several of my recent articles deal with SBC and its noxious effects on companies' financial discipline.
    Dec 2, 2014. 10:00 PM | Likes Like |Link to Comment
  • Positive Seasonality But Supply-Demand Clouds Still Loom For Market [View article]
    LOL jp. Though I think there's a difference between having a lot of particular data and yet not finding a full aggregate set, vs. having no data. You can use the y charts feature here at SA to plot SBC/revenue for any particular company, and when I do so I find a generally upward trend, with some egregious ones (see other articles). OTOH I haven't found anyone who's compiled the stats for the market as a whole, which is what I tried to indicate in the article.
    Nov 19, 2014. 12:25 PM | Likes Like |Link to Comment
  • Positive Seasonality But Supply-Demand Clouds Still Loom For Market [View article]
    Hi Chris,
    I think you have a very good point that margin debt should be normalized as a percentage of total market cap, at least as a second way to appraise the number. If I find a way to plot that (or find a site that's already done it) I may update the article.
    I don't however see the interest rate on margin as being that big a factor in my point of concern. What I see as negative is the leverage that is the necessary result of using margin. If (or when) stock values retreat, then the equity used to secure the margin loans may fall below minimum allowable levels, which causes margin sell-outs, which further reduces stock prices, etc. That's the vicious circle that I was alluding to in the article.
    I also agree that the market fall in 2007/2008 was largely the fallout of the housing market bubble, but certainly that's not the only reason a market can fall.
    Nov 18, 2014. 09:27 PM | Likes Like |Link to Comment
  • Positive Seasonality But Supply-Demand Clouds Still Loom For Market [View article]
    Thanks, I agree completely with your comment.
    Nov 17, 2014. 08:18 PM | Likes Like |Link to Comment
  • Update On ServiceNow: Dilution Continues Apace And New Patent Infringement Case Disclosed [View article]
    I don't make much of it, as every company that uses any open source software (and there are plenty of them) make similar disclosures. Typically the risk will be worded in much more specific terms if it's an imminent risk.
    Nov 12, 2014. 09:15 AM | Likes Like |Link to Comment
  • Update On ServiceNow: Dilution Continues Apace And New Patent Infringement Case Disclosed [View article]
    Thanks for the comment, I wasn't aware of the employee turnover.

    Out of curiosity, do you think any software patents are valuable or useful? If so, is it surprising to you that NOW has none despite being a $10B company? I think the fact that they have none, plus their CEO is on record as saying he's a thief (despite the context diminishing the force of that statement) won't help their legal case. Moreover, I don't think the costs (including management time) to NOW in defending these cases against industry giants will be negligible, particularly since BMC seems to be taking it "personally". Only time will tell however...
    Nov 11, 2014. 09:46 PM | Likes Like |Link to Comment
  • Update On ServiceNow: Dilution Continues Apace And New Patent Infringement Case Disclosed [View article]
    These things are slow, so I'm guessing 12-24 months for the HP case, 24-36 months for BMC. The bigger point is that both cases, but particularly the BMC one, will be a drain and a distraction to NOW for quite some time. I didn't say it in the article, but the BMC complaint reminded me of acrimonious divorces where parties want their pound of flesh no matter what it costs them personally. (OTOH it could all be posturing, I guess we'll find out over time.)
    Nov 10, 2014. 11:41 AM | 1 Like Like |Link to Comment
  • ServiceNow - How Wall St. Turns A Blind Eye To Stock-Based Compensation [View article]
    You're right regarding dilution, and I don't think I double counted the effect. And you're free to disagree with my contention, since that's what makes a market (and seeking alpha), but I'm strongly of the conviction that Wall St, would treat it as much worse if the company kept engaging in secondaries to pay employees, vs. giving them shares which they then turn around and sell. There's no difference in the end state, and yet Wall St (properly IMO) punishes the former while it (improperly IMO) gives a complete pass to the latter.
    Also, the accounting rules you deem antiquated were put in place after the 2000 tech crash in order to avoid the type of "pro forma" shenanigans that we're once again seeing. Moreover, I'd be much more persuaded by the argument "we're giving adjusted numbers because that's how we manage the business", if at times the numbers were better than GAAP, while at other times they were worse. But I think you'll find almost uniformly that adjusted numbers make the company look better than GAAP numbers, so pardon me for doubting the sincerity of the motives behind presenting them.
    Nov 7, 2014. 09:18 PM | 1 Like Like |Link to Comment
  • Art's Way - A Value Nano-Cap With An Ebola Kicker [View article]
    Maybe it's because I spend too much time looking at over-valued companies to find good short sales candidates, but to me ARTW's P/S, P/E, dividend and backlog make it a value play, albeit a modest one as I say in the article. Then if ARTW gains traction on the Ebola/contagious diseases front, their numbers could improve substantially.
    Oct 27, 2014. 09:23 AM | Likes Like |Link to Comment
  • Following Up On A Workday Short [View article]
    Quarterly results from other stocks in the sector (e.g NOW, N) suggest WDAY will post results that the street will like. I'll probably end up adding to my short a few days after earnings.
    Oct 25, 2014. 10:57 AM | Likes Like |Link to Comment
  • The Truth About iBio's Role In Ebola Drug Production [View article]
    LOL at the Yahoo! comment. (I guess people there buy an extra 100 shares for every capital letter they see.) FWIW though, I don't think IBIO has sold those shares yet. The S1 which just became effective allows them to sell up to 300K shares/day going forward with a $10M cap on total sales. It will definitely result in dilution, as will the options and warrants, but it's not all out there yet.
    Oct 20, 2014. 10:37 PM | 2 Likes Like |Link to Comment
  • Following Up On A Workday Short [View article]
    Yes, I'm still short (though as I mention in my disclosure I actively trade around core positions).
    Oct 20, 2014. 10:31 PM | Likes Like |Link to Comment
  • Netflix: Key Points The Bears Miss [View article]
    Hi Guraaf,

    I tend to mentally split my holdings into "trading" shares and "core" shares (not advocating it as a good idea, but that's what I do). I covered a lot of my "trading" shares today ah's, but none of my "core" shares. I'll add back trading shares on (substantial) bounces, but probably won't cover "core" shares till sub $300's and not all til sub $200's. (But please remember NFLX is just one stock in a portfolio, so the gains aren't huge, nor are the losses impossible to deal with when the stock bounces 30% to 50%. Most critics don't appreciate this.)
    Oct 15, 2014. 10:33 PM | Likes Like |Link to Comment
  • Following Up On A Workday Short [View article]
    Yes, like most shorts, the trade carries risks. Nonetheless it's one of my favorite shorts right now. Time will tell...
    Oct 9, 2014. 09:24 AM | Likes Like |Link to Comment
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