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  • Cliffs Natural Resources - Crushed Expectations, Big Buyers In 2015 [View article]
    Good article- could make a nice speculative investment if someone has some patience
    Mar 3, 2015. 02:29 PM | 2 Likes Like |Link to Comment
  • 2 Mysteries [View article]
    that's actually a better explanation - thanks
    Mar 3, 2015. 01:51 PM | 2 Likes Like |Link to Comment
  • 2 Mysteries [View article]
    And if their product is so much less expensive for the customer, how on earth can it cost an additional 30% of revenue to capture that spend?

    I know an Oracle sales manager who has 5 very nice houses. They make great money. It's not like the CRM sales folks are making that much more.

    No, it's not sales compensation.

    Every angle I look tells me that they are cheating. I'd love the author of Freakonomics to look at their data over the last 20 quarters. This would be their logical conclusion on how they are achieving these results; much like the school teachers who miraculously achieved much better testing results for their students once they were incented with a bonus. The data mining proved that they were cheating by changing test answers.
    Mar 3, 2015. 01:48 PM | 8 Likes Like |Link to Comment
  • 2 Mysteries [View article]
    For simplicity's sake, say an average monthly contract is $10,000. So if CRM sold 10 contracts to a company for a 1-year deal, they'd invoice $120,000 and recognize $10,000 per month over next 12 months. Deferred revenue is $110,000 after 1st month.

    Now they move on to company B and sell them the exact same deal but it's a 24 month contract. They invoice for $240,000 and recognize $10,000 in 1st month. Deferred revenue jumps to $230,000.

    OMG they really are amazing! Deferred revenue gapped up 109%!!
    Mar 3, 2015. 12:11 PM | 3 Likes Like |Link to Comment
  • 2 Mysteries [View article]
    Excellently laid out. Agree 100% with your perception of this company.

    When I first started sniffing that CRM's stock price focus and superlative-laden CEO were "Enron-ish" back in 2010 - I followed the Sales & Marketing line and theorized that they were booking certain reductions in revenue as Marketing i.e. Buy 10 seats, get 1 free and book revenue for all 11 seats on the Top Line with a 1 seat cost booked in the Marketing line. (This is a Sarbanes Oxley violation)

    Then one day the stock tanked after they showed Deferred Revenues were slowing (back in 2011 or 2012). And Benioff immediately went on Cramer to beg everyone to follow company guidance. It took them maybe 1 quarter to start closing longer length deals. Initially it was all 12 months in advance, then it went to 24 month deals. And I'm sure once that year came around it went to 36 month on some of them. And no doubt there were up front incentives offered for 3 year deals. And maybe those incentives weren't booked as Reductions in Revenue either. Regardless, Deferred Revenue growth became the new bell weather. He listened to what Wall St wanted to see and made it happen.

    And if they started bringing up their margins you can rest assured CRMs margins would amazingly start to show slow but steady improvements and would become the focal point of all Benioff-speak. If it was that they weren't in streaming services enough, they'd launch SalesFlix as one of their platforms.

    All in the name of stock price. That is the engine that keeps the machine alive.

    And now after 5 years of watching CRM, I'm more convinced then ever that they are cheating. They are either booking Reductions in Revenue below the line in Sales & Marketing, or they are accelerating Deferred Revenue into current quarters to ensure the consistent "beat and raise" that has occurred "amazingly" over the last 20 quarters. And maybe it's a combination of both.

    Secret Upper Management Meeting conversation (nothing in writing)

    "OK team we need $3mm more for our quarterly beat and we are in the last week of the quarter. Who is working extra hard today that theoretically would be work that you'd normally do next week in the new quarter? Oh, you three? excellent. So let's do this, the three of you are working the equivalent of 10 days this week, and there are five days left in the quarter. So we are going to move 5 days of next month's deferred revenue into this current quarter and book as realized revenue this quarter. After all, you're doing next quarters' work with all the hours you're putting in right? And who the hell is ever going to know we are doing this? It can't be traced anywhere unless our accountants refuse, and for 20 quarters now, they've not refused. We even say in our 10-Q that in instances where revenue recognition questions arise, that our team ultimately makes the decision."

    "But boss, that just gets us our beat, how can we possibly predict that our guidance will also beat? The next quarter hasn't even started yet?"
    Mar 3, 2015. 11:42 AM | 14 Likes Like |Link to Comment
  • Salesforce Becomes Fastest Enterprise Software Company To Reach $5 Billion [View article]
    SFWatcher - so do you see what you are saying?

    "The matching of Deferred expenses only relates to those which are directly attributable to the cost of deferred revenues."

    We agree. But what I'm trying to get you to see is that those expenses will always be greater than the revenues i.e. GAAP losses. No profit. Bad.

    They all relate - no expenses are going down. I've been watching for 5 years now. It's the same formula for the last 20 quarters.

    Which expenses are going to drop off so precipitously that they earn actual profit? You know they're not going to stop enriching themselves with stock options.
    Mar 3, 2015. 08:35 AM | 1 Like Like |Link to Comment
  • Bristol Myers' HCV Cocktail Has Gilead, AbbVie In Its Crosshairs [View article]
    The BMS drug only works with GILD's Sovaldi. And it's only for 6% of the market. So your argument is that GILD will actually LOCK UP that 6% with or without BMS.

    I don't understand this article
    Mar 2, 2015. 11:13 AM | 11 Likes Like |Link to Comment
  • I Could Do With Less Transparency [View article]
    When you say that sometimes you prefer to wait until after earnings to sell a PUT, doesn't that take all the juicy premiums out? Or do you find that the options market still registers volatility after an earnings announcement?

    Although I'd rather be selling PUTS on HPQ today vs. last week. I find myself in ownership of a few hundred shares because not only did HPQ tank, but the shares were put on me on Thursday morning. And now I found absolutely wimpy premiums trying to sell calls against the position. As if the market feels that no rebound is in sight.

    It's going to take me a few months to get back to even at this rate, which killed all the joy of the quick return.

    Annoyed in Atlanta
    Mar 1, 2015. 03:40 PM | Likes Like |Link to Comment
  • Salesforce Becomes Fastest Enterprise Software Company To Reach $5 Billion [View article]
    Don't forget that deferred revenue is matched with deferred expenses each quarter i.e. their model will never make a GAAP profit. It's not when, it's if. And the answer is 'probably after SAP buys them at $30 per share in a few years"
    Mar 1, 2015. 01:43 PM | 1 Like Like |Link to Comment
  • All Set To Post Robust Numbers [View article]
    Wow that after hours jump stuck all session. kind of surprised. one theory is that a lot of money that has to stay in tech left HPQ the same day and was just plowed into another tech that evening. makes some sense. It certainly wasn't because of profitability
    Feb 26, 2015. 08:42 PM | Likes Like |Link to Comment
  • A Story With An Unhappy Ending [View article]
    it all goes back to "don't fight the Fed" and Yellen just delayed the interest rate increase for maybe the rest of the year.

    these moves by the States and WalMart etc.. to slowly rise wages will filter up into all wages. and oil supply and demand will re-balance and oil will rise again. once both of these happen, we'll see some inflation (finally) and Yellen will start creeping up the rates.

    if I were long CRM I'd party hard these next 2 quarters then sell everything
    Feb 26, 2015. 01:36 PM | 1 Like Like |Link to Comment
  • Salesforce soars to $68 on in-line results, better-than-feared guidance [View news story]
    there are several different lengths of contracts that they sell. when deferred slowed one year and the stock took a hit, they started selling two year contracts. made deferred really jump.
    Feb 26, 2015. 09:49 AM | Likes Like |Link to Comment
  • Salesforce soars to $68 on in-line results, better-than-feared guidance [View news story]
    I'd sell on this lift for sure. it'll settle back down to the high 50's before next quarterly call. And interest rates will eventually go up although I've been saying that for over a year now.
    Feb 26, 2015. 09:45 AM | 2 Likes Like |Link to Comment
  • Salesforce soars to $68 on in-line results, better-than-feared guidance [View news story]
    Did any sell side analyst calculate GAAP loss per share multiplied by the number of outstanding shares?

    The number (GAAP Loss) is staggering. I'm roughly calculating about a $275,000,000.00 GAAP loss for their fiscal year. That's 275 MILLION DOLLARS in GAAP Losses on $5bn in revenues.

    They are selling $1 bills for $1.05 and then paying themselves $0.10 per sale in stock-based compensation (but not counting that expense)
    Feb 25, 2015. 04:52 PM | 12 Likes Like |Link to Comment
  • Increasing Competition In Cloud May Temper Salesforce's Revenue Growth In Q4 [View article]
    I'll take $55 all day tomorrow
    Feb 24, 2015. 03:54 PM | Likes Like |Link to Comment