Next 10x Stock Winner

manch · May 1, 2018, 10:23pm

SHOP customers are naive people who believe their 5-item online shops can compete with amazon. These people will burn their life savings on Facebook and Google ads, and quit after a year or two.

marcus335 · May 1, 2018, 10:38pm

hanera:

marcus335:

On the call, they commented they’ve been hiring some top talent, and that talent is expensive. That’s why the stock comp is higher creating the delta between GAAP and non-GAAP earnings. The tech world is reported in non-GAAP, because stock comp is not a cash expense.

Why do they need so much top talents? New direction? New products? Too much stock comp will haunt the stock… eventually it will catch up with valuation. Increasingly I’m worry that these companies keep paying stratospheric dollars for talents, and are their clients real consumers like us or some other startups like themselves?

Are clients of SHOP mostly established companies (small to big) or mostly startups? If mostly startups, I’m totally worried… once angels become nasty, they are not able to pay SHOP… That is, SHOP would crash along with those companies.

It works out to 7.6% of revenue. That’s pretty small compared to most tech companies. They are a tech company and software engineers are expensive. They’ll keep developing new features and products. Most of the revenue is from larger businesses.

The small customers are a small percent of revenue.

tomato · May 2, 2018, 4:42pm

what’ll happen to SQ today…

marcus335 · May 2, 2018, 5:01pm

Options market is heavily tilted towards calls, so people think it’ll go up.

tomato · May 2, 2018, 5:15pm

SQ is a pretty volatile stock…

tomato · May 2, 2018, 6:30pm

Now it is up 3%> option buyers already make money.

tomato · May 2, 2018, 7:20pm

I had some Jun calls, felt too close for a potential downfall. Sold some, bought some january ones. if it drops, will buy more.

tomato · May 2, 2018, 8:23pm

SQ dropped 4% AH. Not as bad as i was thinking.

hanera · May 2, 2018, 8:24pm

20%20PM

manch · May 2, 2018, 8:44pm

Square’s expenses were too high they say.

Dorsey-led Square’s quarterly loss widens as expenses soar

https://finance.yahoo.com/news/dorsey-led-squares-quarterly-loss-203457846.html

tomato · May 2, 2018, 8:44pm

There’s also this, doesn’t affect SQ so much since amazon is online and sq is offline.

manch · May 2, 2018, 8:45pm

That came out during the day. Square still closed positive. PayPal dropped like a rock though.

hanera · May 2, 2018, 9:06pm

Is this legal? It amount to dumping below cost😏 Can’t sell a physical product below cost but can sell a service below cost?

marcus335 · May 2, 2018, 9:38pm

Their GM is pretty good, so they aren’t selling the product at a loss. They aren’t covering their corporate expenses. That’s super common for young companies as they scale. The troubling part is expenses are growing faster than revenue. That’s a pretty bad sign.

manch · May 2, 2018, 10:45pm

Square rev grew 51% and operating expenses grew 47% YoY. So rev is still growing faster.

marcus335 · May 2, 2018, 10:57pm

I see 45% rev growth.

" The company saw total net revenue figures of $669, surpassing our consensus estimate of $623.75 million and growing 45% year-over-year. Adjusted revenues came in at $307 million."

GPV growth was only 31%.

manch · May 2, 2018, 11:04pm

“Q1 adjusted EBITDA of $36M vs. $27N one year ago. Adjusted revenue up 51% to $307M. Bitcoin revenue of $34M.”

Not sure what’s adjusted revenue.

tomato · May 2, 2018, 11:15pm

bitcoin revenue 34M - is that “total volume” or their commissions" If it’s the latter, it looks huge.

marcus335 · May 2, 2018, 11:19pm

GPV so total value of transactions. Their commission is a small percent of that.

manch · May 3, 2018, 12:25am

Doesn’t look too bad.