TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<p>In between earnings seasons, we are trying to catch up on the flurry of TMT IPOs over the past few months that have caught our eye. Why Digital Ocean? We're pretty big Amazon bulls cause of AWS, so when we heard there was this mini-AWS that the developer community swears by, had 30%+ EBITDA margins, was accelerating growth by growing dollar retention rates and ARPUs...we had to learn more. Strikes us at the type of business that could be a 5 to 10-bagger over the next year or two. </p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

In between earnings seasons, we are trying to catch up on the flurry of TMT IPOs over the past few months that have caught our eye. Why Digital Ocean? We're pretty big Amazon bulls cause of AWS, so when we heard there was this mini-AWS that the developer community swears by, had 30%+ EBITDA margins, was accelerating growth by growing dollar retention rates and ARPUs...we had to learn more. Strikes us at the type of business that could be a 5 to 10-bagger over the next year or two. Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Capital Markets

Digitalocean Holdings / Equity Capital Markets

<p>DigitalOcean, a developer-friendly provider of cloud computing services, set terms for an IPO and intends to sell 16.5 million shares at expected price range of $44-$47 per share. Tech unicorn has ~573 000 customers in more than 185 countries and targets specific segment of the cloud market: developers, startups and SMBs. Number of developers to grow from 19 million to 45 million by 2030, according to SlashData and there are 100 million SMBs globally.</p><p>DigitalOcean has raised ~$456 million in funding over 13 rounds, according to Crunchbase. Cloud computing unicorn was backed by leading venture capital firms Access Industries, Andreessen Horowitz, IA Ventures and Viaduct Ventures. We expect net proceeds from the offering may reach ~$700 million and funds affiliated with Tiger Global Management and AI Droplet Subsidiary LLC have indicated an interest in purchasing an aggregate of up to a maximum of $175 million in shares in this offering at the IPO price. Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters.  </p>

DigitalOcean, a developer-friendly provider of cloud computing services, set terms for an IPO and intends to sell 16.5 million shares at expected price range of $44-$47 per share. Tech unicorn has ~573 000 customers in more than 185 countries and targets specific segment of the cloud market: developers, startups and SMBs. Number of developers to grow from 19 million to 45 million by 2030, according to SlashData and there are 100 million SMBs globally.DigitalOcean has raised ~$456 million in funding over 13 rounds, according to Crunchbase. Cloud computing unicorn was backed by leading venture capital firms Access Industries, Andreessen Horowitz, IA Ventures and Viaduct Ventures. We expect net proceeds from the offering may reach ~$700 million and funds affiliated with Tiger Global Management and AI Droplet Subsidiary LLC have indicated an interest in purchasing an aggregate of up to a maximum of $175 million in shares in this offering at the IPO price. Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters.  

DigitalOcean IPO. Niche Cloud Provider With Ambitious Growth Strategies

United States

Digitalocean Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides on-demand infrastructure and platform tools for developers, start-ups, and small and medium-sized businesses to build, deploy, and scale software applications. Digitalocean Holdings serves customers worldwide.

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Digitalocean Holdings (DOCN US)

Recent IPO Insights: Digital Ocean

Why Digital Ocean? When we heard there was this mini-AWS that the developer community swears by, had 30%+ EBITDA margins, was accelerating net...

Aaron Gabin

DigitalOcean IPO. Niche Cloud Provider With Ambitious Growth Strategies

DigitalOcean IPO may bring an opportunity for technology investors to increase exposure on fast-growing cloud computing sector

Andrei Zakharov

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