Stan Ackman

Long only, growth at reasonable price
Stan Ackman
Long only, growth at reasonable price
Contributor since: 2013
I can testify that LNKD offers one of the best compensation packages among US tech firms.
Programmers dream to be there.
Another factor is the living costs in the bay area is getting so high. Even a $150k income is hardly enough to buy a decent house. So, the vicious circle begins.
Excellent comment! It is always good to hear from someone who used HERO cams but are still objective about them.
What you said is basically the natural limitation of niche market. If GPRO want to expand to lifestyle area, it will surely lose the specialty appeal for a few specialty niches. There is no solution that fits all. I am sure Woodman wants to expand to the lifestyle area, so he may face backslash that will hurt his backbone.
I personally feel GPRO should stay as a niche player, where it will enjoy quite fat margins. But often ambitious CEOs choose to expand but stuck in the middle. Eventually, they get neither size nor margin.
I was told that most LNKD employees watch the stock price closely. The day the stock drops more than 40%, most of them were depressed and feel they could hardly work there anymore. That's the problem. Employee morale is so tied to the stock perforemance. Given the stock was vastly overvalued at the first place, it is deemed to be a big loss for most employees.
Another big difference of LNKD is they not only award SBC to high level employees, they offer it to low level employees as well. The company basically tried very hard to take advantage of its overvalued stock. Now it is the karma.
It is good you mentioned NFLX. It is definitely one of the few tech stocks thrived after 80% crash. What I noticed is NFLX, as a rather old fashion tech firm (it has been a public company for more than a decade), does not have excessive stock based compensation. Its stock compensation as a % of total operating expense is a little over 6%. While the same number is about 15%-16% for GPRO.
As I said, that was more than a decade ago, when share based compensation for low level employees was not prevailing. I don't think companies that thrive after dotcom bubble are good examples here. Do you have more recent examples?
Robert, my point is the action cam niche market is here to stay if the value proposition is right. I am sure 45% GM is too high. It is unreasonable to expect that.
Woodman's problem is he wants to expand beyond niche market too desperately. He also tries to do too many things at the same time.
On hardware, they try to make HERO 5, Karma, and VR the same time. On software, they tried to build media business but also want to make cloud based editing software.
Look, all of these things could not be even done properly by a company as large as Apple, not to say small boy GoPro with a "lifestyle" CEO. So, it is a problematic strategic decision. At the end, lots of things are rushed. The session blunder, for me, is not a one-time blunder. Rather, it is the tip of an iceberg.
Often, low-mid level R&D employees have little idea how good the companies' business are. They use stock performance to tell. The US tech industry is still short of supply for good programmers, so good programmers don't fear about changing jobs. They often get paid much higher after the job switch. (that's why Apple had a non-poach agreement with many other big tech firms.)
It is just so difficult for GPRO R&D employees to keep their head down and concentrate on further R&D now. Many of them must be paying more attention to their smartphones, which may tell whether they get another offer.
This is an unique aspect of US tech firm now. A decade ago, when share based compensation was not so prevailing for low level employees, bargain hunt on tech crash has better chance to succeed. Financial was the main sector you want to avoid during the stock meltdown. (Stock volatility could kill investment banks.)
Now, stock crash can kill tech companies as well. Often, the only viable outcome for tech companies how share prices crashed is going private. I have not seen a tech company whose stock crashed 90% in 1.5 years could thrive as a public company again. I hope someone finds an exception and let me know.
James, Just curious why you still owns GPRO after admitting he made a mistake for buying it. Did you come back to bargain hunt again? Or did you never sell the stock even after the heavy loss?
Ron, allow me to make a joke. The most frequent words from your comments are clueless and POV. You sounded everyone who is bearish on GPRO (of course including the market) is clueless about GPRO.
As far as POV, I can't remembers how many POVs you have mentioned in total. One hundred?
No offense, my friend. Just have a little fun. No matter we are bullish or bearish, we are all part of this GPRO community. I am still waiting for GPRO's next big update to make my HERO 4 Silver useful again.
I personally think Woodman is right that competition from other action cams is not a problem during the last holiday. The problem is again the size of addressable market size. Woodman is also right that how big the addressable market size depends on how convenient HERO cams are.
The aspect Woodman is wrong is the execution ability of him and his team. Even though he has the vision to improve software even since the pre-IPO period. The company made little progress on that front. Given the workforce cut and plunged stock, I feel the morale of the employees is even worse.
Woodman is like the captain of a ship who knows where to go but does not how to wheel it. His sailors (his developers) are in depress, but he is now asking to sail even faster. It is very unlikely for GoPro to deliver something impressive with such crew. The whole company needs a reset.
What many investors don't realize is how nowadays many US tech companies heavily rely on their stock performance to attract top talent. Programmers turn over very quickly these days. If they feel they could not get deserved compensation due to sink share price, they will leave. I just heard from silicon valley that many LinkedIn employees are considering leaving. They had a very rough day last Friday. Those programmers pay attention to stock price even more than we do.
I was curious about the Android rating. So, they have only crappy iOS programmers?
Do you use GoPro studio, Joe? That app also leaves a lot to be desired.
Hey, insulting Apple users does not make you smart, my friend. Now, I know why you have been always wrong on GPRO. You showed your class.
This is an excellent view from an investor who learned from mistakes.
Woodman is the master of making deals without properly leveraging them. Take a look at how many licensing/partnership he has signed... SONY, MS, Roku, etc. You name it.
I agree with Joe, this deal must be the cloud based software. Not a surprise. That's something Woodman has wanted for a long long time.
Still, it is a cloud is not the break point of the success of software. Just look at GoPro iPhone app rating. A 2.5 of 5. They surely added quite a lot of new features in it. But the bugs and user unfriendliness made the software so poor.
Hey, did I ever say GPRO is a great sell or short at $10? No. Short probably is busily covering right now. For now, until the new products hit the door, there is not much to do from both long and short perspectives.
My point has been, since the stock was $20, do not touch the stock.
Also, do not use the better performance of another bad stock to justify this bad stock. Take a look at LNKD. That shows you how Mr. Market can change his opinion quickly. Just three months ago, it was $270, now it is $110. Murphy's law will apply to these stocks eventually.
dali lama will tell you look at things from another angle. The reason why they are completely out may be the demand is just not there. Retailers do not want to commit too much to this brand.
Just try to offer your a new perspective, my friend. Open your eyes. May dali lama's force be with you.
I personally think analysts did not get this stock wrong. It should be the company deceived the analysts.
Transforming a hardware camera company to a media house is ambitious but doable. With the stellar HERO 4 sales, it is hard to resist the hype.
Stocks like GPRO are very hard to predict due to the nature. That's why they are momentum stocks. Any major news can hype the company up or down tremendously.
One major tool to help invest in companies with huge future uncertainty (both up and down side chances) is to evaluate the quality of the management. Fantastic management could do something revolutionary. Part of the reason GPRO dropped so much is wall street completely lost confidence in Woodman & Co. Should Elon Musk was the CEO, the stock would never be at this level.
It is a very bad idea to recommend investors to buy the stock when it opens 40% lower. This level of plunge will not recover for at least a few months. LNKD had stellar valuation that is no longer tolerated by slower growth and higher market volatility. The stock is going to have a full valuation reset.
At $115, it is still valued at 4 x 2016 revenue. That's still not cheap by any means. The stock will likely still have plenty of downside.
I suspect KORS will start to outperform COH. It actually already happened. Basically, the two companies should be traded at similar market cap. COH has higher P/E because its EPS is more depressed due to turnaround expenses. P/S should be fairly similar for these two companies.
It was silly for KORS to be much smaller than COH a few weeks ago.
You didn't miss anything. They are not going to be profitable at all this year.
Sometimes, have no P/E is better than having P/E though. No P/E means lots of space for hype.
mid Atlantic dad, I know how you are. You are bothered to create a new idea to hide your identity.
I hate Woodman??? That's a big No. I would love to be Woodman if I could. He is a successful man. Young and billionaire with that big fat yacht. What a life!
Admiration aside. Anyone with management experience knows that he is not a suited CEO. He would be better to just be a non-executive chairman and let capable people manage the business. Before the IPO, his dad hired a few very capable folks for him. Around IPO, his hires such as Jack and Tony are both very incompetent. (even Joe agreed ith me on this)
Last, why do I comment a lot on GPRO? Because it is fun. It is very hard to find many stocks with comment volume as high as GPRO's. Some large caps are too boring to comment. So, there we go.
I don't see big volatility from GPRO before they release the new products. The price is getting in a point that further material movement needs new information to validate.
I still bet GPRO will disappoint on new products. You basically could not expect great products from a company full of internal mess. iPhone 5 was not even a great product when there was an internal conflict in the senior management. Cook did the right thing to reorganize the management to make Apple function again. I don't see that happening in GPRO yet.
Working on software is not a bad thing if they could execute. I just advise investors look at what software improvement GoPro has accomplished as a public company.
After almost two years, their iPhone app average review rating declined from 3 to 2.5. The feature like you can crop 15s, 30s is laughable because it does not allow you to crop something like 14s. Do I have to show the one last silly second???
bcc, I agree with you completely. The problem is that we have companies like APPL that is valued based on GAAP EPS, but companies like GPRO tried to deceive some less sophisticated investors by putting non-GAAP ESP upfront to overstate their earnings (these less sophisticated investors will ignore the GAAP non-GAAP reconciliation.)
I am fine as long as Woodman said they report non-GAAP loss per share of 8 cents. But he should not say "we reported a loss of $0.08 per share".
bcc, I agree with you completely. The problem is that we have companies like APPL that is valued based on GAAP EPS, but companies like GPRO tried to deceive some less sophisticated investors by putting non-GAAP ESP upfront to overstate their earnings (these less sophisticated investors will ignore the GAAP non-GAAP reconciliation.)
I am fine as long as Woodman said they report non-GAAP loss per share of 8 cents. But he should not say "we reported a loss of $0.08 per share".
bcc, I agree with you completely. The problem is that we have companies like APPL that is valued based on GAAP EPS, but companies like GPRO tried to deceive some less sophisticated investors by putting non-GAAP ESP upfront to overstate their earnings (these less sophisticated investors will ignore the GAAP non-GAAP reconciliation.)
I am fine as long as Woodman said they report non-GAAP loss per share of 8 cents. But he should not say "we reported a loss of $0.08 per share".
That's why I admire you Joe. You can create gold from mud.
Still, Woodman refused to admit mistakes during the CC. Market never likes this type of attitude. I read hundreds of CC transcripts. Market much prefers management who admit the mistake and detail the correction plan.
Woodman still sounds like all the mistakes they made was a Session pricing error, which is due to a learning curve. He still sounds the company is in great shape (second best quarter EVER). Only fools will believe him this time.
Of course, you don't. But that's the point why high quality videos are always only for a niche. The pool of the niche is also getting smaller because more and more people sacrifice quality of convenience. That's why desktop sales drop every year.
Do you think reading on a smartphone is nicer than reading on a 27 inch desktop? Of course not, but more and more people are doing it because it is more convenient.
Woodman and Bates tried to argue GoPro does not have competition issue or addressable market issue by saying GPRO actually gained market share in North America.
I must say both these two guys know nothing to convince analysts. Hey, if you were gaining market share but still lost 31 % sales from year ago, you are in a big trouble. That means your addressable market really hits the saturation.
What's more? Woodman and Bates tried to make you forget that the cost to gain market share is by losing gross margin by 1000 basis points.
edaciousx, you are fooled by Woodman again, my friend. Take a look at a few notes I made under the earnings call transcript comment section. You may change your mind after seeing my comments there.