Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>'s reported sale of its <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> stake led to a selloff on Meituan and on other companies that Tencent has invested in.</li>
<li>There are 10 listed companies where <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>'s holding is over US$1bn. Some stakes are more likely to be sold than others. </li>
<li>A complete stake sale will benefit some companies more than others since they are part of a wider array of indices and that will bring in passive flow.</li>
</ul>



Tencent (700 HK)'s reported sale of its Meituan (3690 HK) stake led to a selloff on Meituan and on other companies that Tencent has invested in.
There are 10 listed companies where Tencent (700 HK)'s holding is over US$1bn. Some stakes are more likely to be sold than others. 
A complete stake sale will benefit some companies more than others since they are part of a wider array of indices and that will bring in passive flow.


Tencent's Potential Sale of Meituan Stake - Read Across to Other Stocks & Index Implications

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

<ul>
<li>Spotify's earnings were not as impressive as they seemed. Revenue beats driven by huge FX tailwinds, while MAU beats are coming from low ARPU regions.</li>
<li>ServiceNow's earnings were not as weak as seemed. Uberbullish CEO Bill McDermott had already guided to elongated sales cycles, but we think reiterated margin targets and 130% NRR matter more. </li>
<li>Inverse results...Spotify jumped without any evidence of progress towards an unbelievable LT operating model, while ServiceNow fell without evidence that its (superb) LT model is in question.</li>
</ul>


Spotify's earnings were not as impressive as they seemed. Revenue beats driven by huge FX tailwinds, while MAU beats are coming from low ARPU regions.
ServiceNow's earnings were not as weak as seemed. Uberbullish CEO Bill McDermott had already guided to elongated sales cycles, but we think reiterated margin targets and 130% NRR matter more. 
Inverse results...Spotify jumped without any evidence of progress towards an unbelievable LT operating model, while ServiceNow fell without evidence that its (superb) LT model is in question.


TMT Earnings Quick Hits: Spotify and ServiceNow

<ul>
<li>Like Netflix, Spotify is increasing spend on proprietary content... at the same time rivals are, which makes the ROI on this spend worth less.</li>
<li>Promised margin inflection no where in sight. Have to wait for Analyst Day for more clarity. </li>
<li>While we could justify a share price in the $70s, we no longer think Spotify is as compelling a risk reward short as it has for the past two years.</li>
</ul>


Like Netflix, Spotify is increasing spend on proprietary content... at the same time rivals are, which makes the ROI on this spend worth less.
Promised margin inflection no where in sight. Have to wait for Analyst Day for more clarity. 
While we could justify a share price in the $70s, we no longer think Spotify is as compelling a risk reward short as it has for the past two years.


US Tech Company Research, MT Capital

MT Capital

US Tech Company Research

I demystify the world's most interesting tech companies, providing in-depth, no-nonsense, un-biased analysis on the most interesting Tech Companies available for investment today. I am a Mechanical Engineer by education, Software Engineer by trade and a self-trained Financial Analyst.

<ul>
<li>With Spotify’s newfound all-things-audio ambition, we can take note of some noticeable happenings within the broad media category as a whole</li>
<li>Starting off high-level, the company offers users access to its platform in two distinct manners, with a free membership or through a premium counterpart</li>
<li>In short, Spotify is on a quest to capture the opportunity provided by an industry that is rapidly expanding in all directions</li>
</ul>


With Spotify’s newfound all-things-audio ambition, we can take note of some noticeable happenings within the broad media category as a whole
Starting off high-level, the company offers users access to its platform in two distinct manners, with a free membership or through a premium counterpart
In short, Spotify is on a quest to capture the opportunity provided by an industry that is rapidly expanding in all directions


<ul>
<li>Tesla is a short. We know. You can't short it. But it is a short.</li>
<li>We continue to look for businesses that overearned and pulled in growth during the pandemic...some more recently identified examples: CHWY, ROKU</li>
<li>Spotify remains one of our top short ideas, bad business model, and now increasing competition from alternative listening services. </li>
</ul>


Tesla is a short. We know. You can't short it. But it is a short.
We continue to look for businesses that overearned and pulled in growth during the pandemic...some more recently identified examples: CHWY, ROKU
Spotify remains one of our top short ideas, bad business model, and now increasing competition from alternative listening services. 


Luxembourg

Spotify Technology S.A. provides music streaming services. The Company offers commercial free music and ad-supported services to subscribers. Spotify Technology serves clients worldwide.

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Spotify (SPOT US)

Tencent's Potential Sale of Meituan Stake - Read Across to Other Stocks & Index Implications

A Reuters report that Tencent intended to sell its stake in Meituan led to a selloff across Tencent's investee companies. The impact of passive...

Brian Freitas

TMT Earnings Quick Hits: Spotify and ServiceNow

A tale of two cities...Spotify jumped without any evidence of progress towards an unbelievable LT operating model, while ServiceNow fell without...

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Spotify 1Q22 Earnings: Netflix Like?

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Spotify ($SPOT): In-Depth Analysis

With Spotify’s newfound all-things-audio ambition, we can take note of some noticeable happenings within the broad media category as a whole

MT Capital

1H22 Obex Research Short Portfolio

Our top short ideas for 2022: Tesla, Roku, Palantir, Spotify, Doordash, Expensify, AMC, and Teradata. Continue to like pandemic related...

Aaron Gabin

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