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

Palantir Technologies  / Equity Bottom-Up

<p>I'm trying to come up with some meme-able business idea so like Adam Aron (no relation) I can raise $589MM. If the SmartKarma community has any idea, I'm all ears. I'll even go with something not in terminal secular decline!</p><p>On to the weekly...Palantir's general level of ridiculousness hits another level, Twitter discovers business models invented 4-5 years ago, and work from home keeps working.</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>

I'm trying to come up with some meme-able business idea so like Adam Aron (no relation) I can raise $589MM. If the SmartKarma community has any idea, I'm all ears. I'll even go with something not in terminal secular decline!On to the weekly...Palantir's general level of ridiculousness hits another level, Twitter discovers business models invented 4-5 years ago, and work from home keeps working.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.  

TMT Weekly:  3 Things that Stood Out The Week of 6/​4/​​​​​2021 (Non-AMC Edition)

Latest News from the World’s Leading Innovators

Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

<p>Headline Developments It’s a big edition this week, so settle in! Elon Musk’s Boring Company (private) broke ground this week, shooting Tesla (TSLA) passengers through a high-speed tunnel under Las Vegas.  The loop comprises 2.7km of tunnels, built 30 feet under the Las Vegas Convention Center.</p>

Headline Developments It’s a big edition this week, so settle in! Elon Musk’s Boring Company (private) broke ground this week, shooting Tesla (TSLA) passengers through a high-speed tunnel under Las Vegas.  The loop comprises 2.7km of tunnels, built 30 feet under the Las Vegas Convention Center.

<p>Palantir’s earnings call was a master class in obfuscation.</p><p><strong>Since 4Q20 earnings on February 16, 2021, five C-Suite executives from Palantir have sold $250MM (!!) in stock, with CEO Alex Karp selling $137MM in just the past 3 months. Luckily for them, Cathie Wood and ARK has bought 20M shares for $480MM! </strong></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>

Palantir’s earnings call was a master class in obfuscation.Since 4Q20 earnings on February 16, 2021, five C-Suite executives from Palantir have sold $250MM (!!) in stock, with CEO Alex Karp selling $137MM in just the past 3 months. Luckily for them, Cathie Wood and ARK has bought 20M shares for $480MM! 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.

Palantir 1Q21 Earnings: ARK’s Buying What They’re Selling

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/tuya-inc" target="_blank" data-smartkarma-citation="entities:32158:1" rel="noopener">Tuya Inc (TUYA US)</a> provides a backend service for IoT (internet of things) device makers. Tuya offers its customers a Platform-as-a-Service (PaaS) for IoT devices that handles the connectivity, device software and application development.</p></div><div><p>Tuya has priced its IPO at $21.00 per ADS to raise gross proceeds of $915 million, above the previous IPO price range of $17-20 per ADS, according to Bloomberg. At the final IPO price of $21 per share, Tuya will have a market cap of $11.8 billion. The IPO got off to a strong start due to indications of interest for $500 million worth of ADSs in the offering from existing investors (<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> and Hillhouse Capital) and new investors (Canada Pension Plan Investment Board, Dragoneer Investment Group, GIC and Tiger Global Management).</p></div><div><p>In <a href="https://www.smartkarma.com/insights/tuya-ipo-initiation-connected-future" target="_blank" data-smartkarma-citation="insights:48695" rel="noopener">Tuya IPO Initiation: Connected Future</a>, we opined that Tuya’s PaaS solutions are well-positioned to benefit from the rising need for third-party IoT PaaS providers who can provide the required tools. We concluded that Tuya’s fundamentals are attractive. In <a href="https://www.smartkarma.com/insights/tuya-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:49137" rel="noopener">Tuya IPO: Valuation Insights</a> we noted that the IPO price range is reasonable but full at the high-end. </p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of $20.65 per ADS. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis points to a meaningful upside based on securing a modest share of the addressable market. </p></div></div></div>

Tuya Inc (TUYA US) provides a backend service for IoT (internet of things) device makers. Tuya offers its customers a Platform-as-a-Service (PaaS) for IoT devices that handles the connectivity, device software and application development.Tuya has priced its IPO at $21.00 per ADS to raise gross proceeds of $915 million, above the previous IPO price range of $17-20 per ADS, according to Bloomberg. At the final IPO price of $21 per share, Tuya will have a market cap of $11.8 billion. The IPO got off to a strong start due to indications of interest for $500 million worth of ADSs in the offering from existing investors (Tencent Holdings (700 HK) and Hillhouse Capital) and new investors (Canada Pension Plan Investment Board, Dragoneer Investment Group, GIC and Tiger Global Management).In Tuya IPO Initiation: Connected Future, we opined that Tuya’s PaaS solutions are well-positioned to benefit from the rising need for third-party IoT PaaS providers who can provide the required tools. We concluded that Tuya’s fundamentals are attractive. In Tuya IPO: Valuation Insights we noted that the IPO price range is reasonable but full at the high-end. Updating for the final IPO net raise, our base-case DCF derived price target of $20.65 per ADS. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis points to a meaningful upside based on securing a modest share of the addressable market. 

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

<p>San Francisco-based ON24 Inc., cloud-based digital experience platform and provider of webinar, virtual event and multimedia experiences, finally priced IPO at $50 per share (top of the range) by offering ~8.6 million shares, what implies an IPO valuation of ~$2.3 billion at top of the price range. The stock is expected to trade on the NYSE under the ticker “ONTF” starting today.  </p><p>Goldman Sachs, J.P. Morgan Securities and KeyBanc Capital Markets are lead underwriters on the IPO. ON24 Inc. has raised a total of ~$72 million in funding over 6 rounds. Their latest $25 million venture round was led by Goldman Sachs in 2016. ON24 Inc. was founded in 1998 and backed by U.S. Venture Partners, Canaan Partners, Goldman Sachs, Rho Ventures, Merrill Lynch, Comdisco Ventures and Reuters Venture Capital.  </p>

San Francisco-based ON24 Inc., cloud-based digital experience platform and provider of webinar, virtual event and multimedia experiences, finally priced IPO at $50 per share (top of the range) by offering ~8.6 million shares, what implies an IPO valuation of ~$2.3 billion at top of the price range. The stock is expected to trade on the NYSE under the ticker “ONTF” starting today.  Goldman Sachs, J.P. Morgan Securities and KeyBanc Capital Markets are lead underwriters on the IPO. ON24 Inc. has raised a total of ~$72 million in funding over 6 rounds. Their latest $25 million venture round was led by Goldman Sachs in 2016. ON24 Inc. was founded in 1998 and backed by U.S. Venture Partners, Canaan Partners, Goldman Sachs, Rho Ventures, Merrill Lynch, Comdisco Ventures and Reuters Venture Capital.  

ON24 IPO. Perfect Market Timing To Go Public

United States

Aspen Technology, Inc. provides software solutions. The Company offers asset optimization software that optimizes asset design, operations, and maintenance in complex, industrial environments to enable organizations to meet their business goals for sustainability and profitability. Aspen Technology serves customers worldwide.

Paycom Software Inc provides cloud-based HCM software solution delivered as Software-as-a-Service.  The Company provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement.

Check Point Software Technologies Ltd. develops, markets and supports a range of software and hardware products and services for information technology (IT) security and offers its customers a network and gateway security solutions, data and endpoint security solutions and management solutions.

SS&C Technologies Holdings, Inc. develops and markets computer software for financial services providers.  The software enables trading and modeling, portfolio management and reporting, accounting, performance measurement, reconciliation, reporting, processing, and clearing.

Manhattan Associates, Inc. provides information technology solutions for distribution centers.  The solutions are designed to enable the efficient movement of goods through the supply chain.  The Company's solutions optimize the receipt, storage, and distribution of inventory, as well as manage equipment and personnel within a distribution center.

HubSpot, Inc. provides a cloud-based marketing and sales software platform. The Company offers integrated applications that helps in lead generation and social marketing.

PTC Inc. develops and delivers technology solutions, comprised of software and services. The Company's technology is primarily used by discrete manufacturers to design, operate and maintain complex products. PTC's technology is also used to connect products to the Internet for purposes of capturing and analyzing information from them.

Tyler Technologies, Inc. provides end-to-end information management solutions and services for local governments. The Company's client base includes local government offices throughout the United States, Canada, Puerto Rico, and the United Kingdom.

Splunk Inc. develops web based application software. The Company provides software that collects and analyzes machine data generated by websites, applications, servers, networks, and mobile devices. Splunk serves customers worldwide.

MicroStrategy Incorporated provides business intelligence software and related services.  The Company's technology platform enables departments and enterprises to deploy Web-based reporting and analysis solutions.  MicroStrategy also offers consulting, training, and support services.  Solutions are provided to retail, finance, telecommunications, insurance, dot-com, and healthcare industries.

Xero Limited offers an online accounting system.  The software features bank transaction importing, a cashbook, a general ledger, invoicing, accounts receivable, accounts payable, financial reporting, and management of expense claims.

CAPCOM CO., LTD. develops consumer video game software.  The Company also develops, manufactures, markets, and leases arcade game machines.  Capcom also operates amusement facilities.

Oracle Financial Services Software Ltd. provides comprehensive information technology solutions to the financial services industry worldwide. The Company provides transaction processing and accounting software for banks, investment managers and mutual funds. Oracle Financial also provides internet delivery of financial services as well as business intelligence and analytical applications.

Globant S.A. is a software solutions company. The Company provides engineering, design, and innovation services for clients throughout North America and Europe.

Konami Holdings Corporation provides digital entertainment, health and fitness and gaming products. The Company develops and sells video games, mobile games and computer games, gaming machines, pachislot and pachinko machines, and fitness machines as well as operates health and fitness clubs.

Nexon Co., Ltd. mainly develops and services, online games for PC and mobile devices. The company also offers consulting services related to online-games. Nexon operates in Japan.

ORACLE CORPORATION JAPAN sells a variety of software, including database management system software, application development tools, decision-making support tools, and business related applications.  The Company also provides support services for users.

IFLYTEK Co., Ltd. specializes in speech intelligence and artificial intelligence technology.  The company also develops chip product, voice messaging software and e-government system integration software.

Nemetschek AG provides standard software for designing, constructing and managing buildings and real estate.  The Company's software offers cost estimation, design, planning, account calculation, cost management, facilities management, document management and B2B e-commerce capabilities.  Nemetschek's software is sold in approximately 52 countries and 13 languages.

The Sage Group plc is a software publishing company. The Group develops, publishes and distributes accounting and payroll software for personal computer systems. Via its subsidiaries, Sage also maintains a registered user database which provides a market for their related products and services, including computer forms, software support contracts, program upgrades and training.

Zoom Video Communications, Inc. develops a people-centric cloud service that transforms real-time collaboration experience. The Company offers unified meeting experience, a cloud service that provides a 3-in-1 meeting platform with HD video conferencing, mobility, and web meetings. Zoom Video Communications serves customers worldwide.

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Zoom Video Communications Inc (ZM US)

TMT Weekly: 3 Things that Stood Out The Week of 6/4/2021 (Non-AMC Edition)

Palantir's general level of ridiculousness hits another level, Twitter discovers business models invented 4-5 years ago, and work from home keeps...

Aaron Gabin

Weekly Innovation Review (WIRE) #35

Headline Developments It’s a big edition this week, so settle in!Elon Musk’s Boring Company (private) broke ground this week,...

Granite Bay Capital

Palantir 1Q21 Earnings: ARK’s Buying What They’re Selling

Since 4Q20 C-Suite executives from Palantir have sold $250MM (!!) in stock, with CEO Alex Karp selling $137MM in just the past 3 months. Luckily...

Aaron Gabin

Tuya IPO: Trading Debut

Tuya has priced its IPO at $21 per ADS above the marketed range of $17-20 per ADS. Our sensitivity analysis points to a meaningful upside based on...

Arun George

ON24 IPO. Perfect Market Timing To Go Public

We believe shares of VC-backed provider of webinar and virtual events ON24 have substantial upside potential and look undervalued at IPO price of...

Andrei Zakharov

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TMT Weekly: 3 Things that Stood Out The Week of 6/​4/​​​​​2021 (Non-AMC Edition)

Palantir's general level of ridiculousness hits another level, Twitter discovers business models invented 4-5 years ago, and work from home keeps...

Aaron Gabin

Weekly Innovation Review (WIRE) #35

Headline Developments It’s a big edition this week, so settle in!Elon Musk’s Boring Company (private) broke ground this week,...

Granite Bay Capital

Palantir 1Q21 Earnings: ARK’s Buying What They’re Selling

Since 4Q20 C-Suite executives from Palantir have sold $250MM (!!) in stock, with CEO Alex Karp selling $137MM in just the past 3 months. Luckily...

Aaron Gabin

Tuya IPO: Trading Debut

Tuya has priced its IPO at $21 per ADS above the marketed range of $17-20 per ADS. Our sensitivity analysis points to a meaningful upside based on...

Arun George

ON24 IPO. Perfect Market Timing To Go Public

We believe shares of VC-backed provider of webinar and virtual events ON24 have substantial upside potential and look undervalued at IPO price of...

Andrei Zakharov

TMT Weekly: 3 Things that Stood Out The Week of 6/4/2021 (Non-AMC Edition)