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  • I'm Still Baffled By Splunk's Valuation - No Profitability In Sight [View article]
    Finally, someone that gets it! Completely agree with you, riskrunner.
    Jun 24, 2014. 07:24 PM | 1 Like Like |Link to Comment
  • Take Advantage Of The Market's Pop And Short These 3 Stocks [View article]
    Pretty incomplete thesis other than "I think" and "I believe" - should have been titled "I hope"? Take ServiceNow's TAM for example; you are way off. But one can expect a bearish article is going to distort some facts. The only one of these three names that I follow closely is ServiceNow (and most of the other enterprise SaaS companies for that matter). The volatility makes for great swing trades but LONG is the stronger trend on SaaS by far due to revenue growth...look at CRM for example. The SaaS companies are crushing their respective old tech competitors. Price action has been decent as a result. Even in a weak tape these names are holding up as buyers move back in. You need to keep in mind that the insider selling in these newer companies is a small percentage of what they own and you can't expect insiders to hold indefinitely. Also the price targets you have are kinda sorta really silly - that's what prompted me to even write a comment. No less ridiculous than a perma-bull saying it's going to the moon. Thanks for the fun read anyway and happy trading.
    Jun 12, 2014. 03:15 PM | 1 Like Like |Link to Comment
  • Software-As-A-Service Stocks: Are We Stupid? [View article]
    I agree the podcast was vague, but it did make some valuable points, as you do here. Most of these stocks have already reset to more realistic valuations for high growth companies. There are growth metrics and value metrics, and p/s ratio has been the standard measure for growth companies. Growth investors need to remind themselves that these SaaS companies simply dwarf "old tech" competitors in top line growth (high double digits vs. low single digits or negative growth). Nothing has changed. Sure, old tech can position some of their technology to be delivered via the cloud but in no way can they compete on price without risk of cannibalizing perpetual license sales streams. They have too much overhead to compete on price without re-engineering their businesses. What is clear is that IT departments are beginning to move more and more to the cloud and these SaaS players continue to stand out. We're still in the infancy stages here. If the economy worsens, the picture looks even brighter for these SaaS companies as IT departments hasten their shift to the cloud to better manage costs (OpEx vs large unpredictable CapEx) with shrinking budgets and less staff. IT departments will still need to function and the cloud allows them to do it for much less. This significant pullback could definitely be viewed as an opportunity. Over the years CRM has seen its share price cut in half a few times, only to reach new highs. Some say don't try to catch a falling knife...be real and don't expect to buy at the absolute bottom either. Looking at individual charts, that could be behind us on some of these. Be patient and do not look for the quick buck.
    Jun 4, 2014. 04:41 AM | Likes Like |Link to Comment
  • Why The BlackBerry Will Be An Instant Enterprise Success [View article]
    What I've seen is that IT departments have been moving to a more open standard and BYOD (bring your own device). This presents its own set of challenges in managing multiple platforms. BBRY needed to focus on two areas - continue to enhance manageability features for the enterprise and make it easier for IT to secure & support, and usher in new handsets with features that users want. It seems like they are starting to execute again.
    Feb 4, 2013. 02:28 PM | 1 Like Like |Link to Comment
  • ServiceNow Earnings Review - Is There Trouble Ahead? [View article]
    I wouldn't count on 40 million shares being released. Just because the lockup is expired does not mean insiders have to sell...especially at depressed levels. I understand it's your job as a short to try and create a stampede for the exit (hence yours and kerrisdales reports the day before lockup). Recent lockups include Facebook and Splunk - both rose on the day of lockup when people realized it was not as bad as initially thought.
    Jan 31, 2013. 04:37 PM | Likes Like |Link to Comment
  • ServiceNow Earnings Review - Is There Trouble Ahead? [View article]
    Good luck with that - this stock will never see the teens. Too many people would jump on it. It's only a matter of time before revenue is in the billions.
    Jan 31, 2013. 04:30 PM | Likes Like |Link to Comment
  • ServiceNow: Disaffected Customers Mark The Peak Of Its Hype Cycle [View article]
    This is the third bearish article by the same short seller who is holding a huge short position in this stock. Same old short and distort that cannot be trusted. It is a shameful desperate smear campaign in it's worst form in attempt to scare investors. This is not some unbiased public service he is performing. I believe most folks will see through this. It's no coincidence the timing of previous reports coincides with lockup dates to panic shareholders. Dirty but clever tactic.

    Also, Wall street does not think NOW has a near monopoly in the market, but Gartner sure regards them highly in their latest report by placing second highest in their Magic Quadrant and closing in very quickly on BMC. The author fails to understand that the market for NOW is much bigger than $1.5B. Sure, Help Desk is a $1.5B market but the overall ITSM market which NOW addresses includes many more disciplines outside of core help desk and is much larger. No doubt this company will have some growing pains as they were just listed today as #1 job creator in the software market in the Top 100 to address heavy customer demand, but they have an extremely bright long future ahead of them. Many other points I can make here but will save my breath...
    Jan 9, 2013. 12:08 PM | 4 Likes Like |Link to Comment
  • ServiceNow's Technology Is Not 'Now' Anymore [View article]
    Rule #1 - Never make investment decisions solely on information that is provided by the competition of the company you are seeking to invest in...it'll be underhanded 100% of the time.

    There's a reason Servicenow does things the way they do and it's best to go to them for those reasons. They've got one of the most comprehensive wiki's on their solutions I've seen, and they hold product related webinars all the time so it's not like there's a lack of info.

    Regarding multi-tenancy - do you think enterprise customers (or any customer) like to know they share a slice of the same instance of software with many other companies, especially with an application that is the heart of IT. Latency, security, outages that impact multiple customers all come to mind. This is one of the many reasons clients choose Servicenow and they have a near perfect renewal rate.
    Jan 7, 2013. 03:46 PM | 1 Like Like |Link to Comment
  • ServiceNow's Technology Is Not 'Now' Anymore [View article]
    Not sure how you can even think about calling 87% YoY revenue growth flat, especially when you look at NOW's competitors as outlined above, some with negative growth! Shorts say anything these days to create false perceptions. Short and distort bottom feeding plain and simple.
    Dec 28, 2012. 06:21 PM | 1 Like Like |Link to Comment
  • ServiceNow's Technology Is Not 'Now' Anymore [View article]
    This also gave me a good chuckle: "Necessary periodic upgrades required by ServiceNow are also inconvenient for the customer and can take a long time. This usually requires a programmer to go on premise and manually update the company's computers."

    If you knew what SaaS, On Demand, or Cloud meant, and the fact that Servicenow is delivered that way, you'd realize how silly of a statement that was. Also, Servicenow applies the upgrades automatically at no charge (http://bit.ly/10kpvO6).

    Please do your homework next time. While you are at it, you might also want to buy a new calculator for your math, and Windex for the crystal ball with predictions out to 2030?! You are making this too easy.
    Dec 26, 2012. 05:55 PM | 2 Likes Like |Link to Comment
  • ServiceNow's Technology Is Not 'Now' Anymore [View article]
    Servicenow is not on the decline. Quarter over Quarter subscription sales have been increasing.
    Q4 = 14%
    Q1 = 14%
    Q2 = 18%
    Q3 = 18%
    Q4 = TBD

    I said it before I'll say it again: Show me other public companies that are seeing the same annual revenue growth. The only ones that come close are mostly SaaS players, and even most of them do not have the same growth trajectory as Servicenow. This is why they command a premium.

    Servicenow Q3 YoY growth = 87%

    Now let's look at Servicenow's closest competitor BMC:
    Q3 YoY for License revenue for Enterprise Service Management (ESM) was -11%! You read that right, minus 11 percent.

    HP is in shambles, software revenue was actually up 18% YoY but that increase was solely due to their Autonomy acquisition. Without that buffer, they'd be DEEP in the negative. Most CIO's have an exit strategy to move away from HP, or their job is likely at stake.

    Computer Associates (CA): Last quarter revenues were -4%! Another one in the negative.

    IBM saw an increase of 1.4% YoY in software.

    These are NOW's main competitors. The rest of the competition are akin to mice getting breadcrumbs.

    The technology is far from outdated. Go to their live demo site and see for yourself. This article is severely false and investors need to know that. Short and distort. Any investor in Servicenow needs to due their own due diligence. This article's intent and timing is an attempt to capitalize on the lockup expiration today.
    Dec 26, 2012. 03:52 PM | 2 Likes Like |Link to Comment
  • ServiceNow: Insiders Dumping Shares Indicates Overvaluation [View article]
    In my experience, most shorts always have these super unrealistic price predictions. "It's going to get cut in half", "it's 2X overvalued"...scare tactics or wishful thinking, you decide. The stock is worth what the majority of investors feel it's worth. They have only gained more recognition & credibility, added more sales people, added more customers, and are continuously make improvements to their offerings. The case for short is weak here.

    Show me other public companies that have seen the same annual revenue growth. The only ones that come close are mostly SaaS players, and even most of them do not have the same growth trajectory as Servicenow. This is why they command a premium. Different types of companies command different valuations. Once all of the new sales folks establish their pipelines and become productive in 2013, the growth rate will further increase. It's a natural cycle.

    Servicenow Q3 YoY growth = 87%

    Now let's look at Servicenow's closest competitor BMC:
    Q3 YoY for License revenue for Enterprise Service Management (ESM) was -11%! You read that right, minus 11 percent.

    HP is in shambles, software revenue was actually up 18% YoY but that increase was solely due to their Autonomy acquisition. Without that buffer, they'd be DEEP in the negative. Most CIO's have an exit strategy to move away from HP, or their job is likely at stake.

    Computer Associates (CA): Last quarter revenues were -4%! Another one in the negative.

    IBM saw an increase of 1.4% YoY in software.

    So there you have it, after a looking at Servicenow's main competition, you can see why investors are willing to pay a premium here. No one else even really comes close.
    Dec 6, 2012. 06:15 AM | 2 Likes Like |Link to Comment
  • ServiceNow: Insiders Dumping Shares Indicates Overvaluation [View article]
    This is the author's second article within a month on Servicenow. If at first you don't succeed...hmmm.

    They had plenty of demand for the shares on the secondary. Also, the insiders did not even come close to "dumping" their shares as indicated. Of the few people that sold, they still hold the majority of their positions. If they liquidated their entire positions that might cause for alarm, but that was clearly not the case. There is nothing wrong with taking some money off the table. You can't expect them to hold every single share indefinitely...serious...

    Servicenow has won numerous industry awards and continues to do so. The pace at which they add customers and grow subscription revenue on a quarter over quarter basis is astounding. Business is seriously booming for these guys. Not too many companies see their revenues nearly double on an annual basis since their inception. This is not some ailing company by any stretch as painted in the author's reports. These guys are just getting started now that they are public. I'm not sure if he has something personal against the success of these guys but it sure seems that way, because there are WAY better candidates to short out there.
    Dec 5, 2012. 03:06 PM | 1 Like Like |Link to Comment
  • ServiceNow: Decelerating Growth, Limited Market Size Point To Large Downside [View article]
    Every year revenue has pretty much been doubling, just look at the history; your future projection assumptions are askew. There is no denying revenue growth has been explosive which is projected to continue. Their average revenue per customer has continued to trend upward quarter over quarter as well. They achieved all of this with a tiny sales force, and they have been making significant additions to their sales team to match demand. You painted this as a weakness in your article that they are morphing to a sales driven company - the reality is that sales drives growth! All of the 11 major analysts covering NOW have 1 year target estimates rated from $27 to $40 with a consensus mean target of $34.11 and growth estimate of 105% for next year. Even if you take the low target of $27 we're pretty much there at these levels - the big money to be made in shorting has already happened from when the stock was trading in the $40+ levels. Who's right - you or the 11 analysts who do this for a living? At the very least NOW is a hold from here.
    Nov 19, 2012. 01:11 PM | Likes Like |Link to Comment
  • ServiceNow: Decelerating Growth, Limited Market Size Point To Large Downside [View article]
    Your report was looking credible up until the point you went into the details of the of the software and it's underlying platform. Having sold in this space (ITSM) for more than 11 years including with all of the legacy players, I can tell you first hand there are a number of fallacies in your report...and no, I do not work for Servicenow - I just did a ton of homework on my competition. Have you looked at their CMDB? That's the heart and sole of ITSM and the golden source of data for the help desk. Their competition doesn't hold a candle to what Servicenow offers. As a former competitor, I've had my hat handed to me more than a few times on that feature alone and the flood of references they have never helped. Also, upgrades do not get any easier than with servicenow, regardless of the amount of customization users make since all customizations are preserved through the upgrade process - it's right there on their website complete with tons of testimonials. Have you seen their wiki and online forums and user community? It's all in the open for the world to see and it's evident their clients love the technology when you read through it. Are you aware of their high (95%+) client retention rates on renewals? Their success was not only driven by a solid product but also how they embrace their clients and work with them on continually evolving the product for the betterment of the community - this also ensures customers are successful with their products. No other company does that like they do. They even provide a full working base release on their website that any prospect can access - the product speaks for itself...

    You also called out the fact that they do not even appear on Gartner's Magic quadrant for Workload Automation. Just a few short years ago they weren't on the quadrant for ITSM either, and in that time they've turned the industry on it's head. They forced their competitors to try similar SaaS delivery methods but they don't even compare at this point. You've got the analysis of their Platform all wrong too regarding integration with other technologies. More than half of their customers have leveraged its extensible nature to develop their own applications and integrate with existing systems (it's right there on their website, testimonials and forums). Their velocity does not appear to be slowing either, if anything it's picking up. I sell in a different tech space these days but I can tell you their buzz is increasing all the way to the CIO and CFO level. Nothing comes even close the level of functionality offered for the price.

    I'm just scratching the surface here on why your "article" paints a distorted picture of the company and technology. It seems pretty pervasive these days for anyone to start their own little smear campaign with the hope of reaping profits. In the tech industry we commonly called it FUD (fear, uncertainty and doubt) to steer customers away from our competitors. I guess in the world of the stock market it's the opposite of pump and dump, which is short and distort. From the Motley Fool Wiki: The "Short and Distort" stock manipulation scheme is a lesser known, and less common, variant of the Pump and dump stock manipulation scheme.
    In this strategy, the scammer sells short a stock, and then ether produces or hires someone to publish negative material about the company. The scammer then sends this information to random individuals, usually in the form of paid mailers, spam stock touts or fax blasts. Once enough investors fall for the con and sell their stock, the scammer covers at a profit.
    Nov 15, 2012. 05:46 PM | 2 Likes Like |Link to Comment
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