In today’s briefing:
- Snapchat Guidedown: Overdone, But Buy FB/AMZN First
- Grab IPO Lock-Up – Over 60% of the Stock Worth Nearly US$8bn Comes Free
- S&P 500 Downtrend Channel Intact & Testing Support; Buy Ideas Within Energy & Biotech
- Faraday Future (FFIE)–Hanging by a Thread With 3 Months of Cash Left
- Freshworks: Solid 1Q and Strong Outlook Despite Delays With Closing Deals in Europe
Snapchat Guidedown: Overdone, But Buy FB/AMZN First
- Snapchat’s guidedown resulting in a 30% drawdown is fantastical. 6x sales is now 4x sales, near alltime lows.
- Was guide down worth 30% drawdown given already valuation compression and volatility of Snap guidance? Sour grapes here.
- Of course macro deteriorated. Who is doing Snap’s forecasting? We think forecasting easier to fix than LT competitive moat. We’d buy SNAP…but buy FB first!
Grab IPO Lock-Up – Over 60% of the Stock Worth Nearly US$8bn Comes Free
- Grab raised around US$4.5bn in its de-SPAC listing in Dec 2021. The shares are now trading around 68% below the listing price.
- At the time of listing, all of its top investors were locked up for six months. The lock-up expires on 30th May 2022.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
S&P 500 Downtrend Channel Intact & Testing Support; Buy Ideas Within Energy & Biotech
- We see the S&P 500 as trading within a downtrend channel; as long as it remains within this channel, our intermediate to long-term outlook is bearish at the index level.
- With that said, the S&P 500 is currently testing support within the downtrend channel, and we are on watch for a potential bear market rally.
- We will need to see a bullish reversal of the 1-month downtrend (currently at 4030-4050) to have confidence that a tradeable bounce is underway, with the potential for more.
Faraday Future (FFIE)–Hanging by a Thread With 3 Months of Cash Left
- EV start-up Faraday Future released their delayed Q1 2022 results & had some hair-raising disclosures on their first-ever earnings call.
- Cash halved in the 3 months since Q4 2021 & dropped another 20% as of April 30th. Faraday didn’t deny that they have roughly a quarter’s worth of cash left.
- We can’t see how Faraday raises cash in the current risk-adverse markets. And we don’t see any assets worth buying them out for. Faraday is in need of a miracle.
Freshworks: Solid 1Q and Strong Outlook Despite Delays With Closing Deals in Europe
- Freshworks (FRSH US) upgraded its revenue guidance to ~$502M at the top end for FY22 and reported a 42% year-over-year revenue growth rate in 1QFY22.
- We were impressed with subscription revenue growth, lower-than-expected loss, customer expansion, and efficient SaaS metrics.
- We analyzed multiples of 50 publicly listed software companies with various growth profiles and split SaaS/Fintech companies into four growth groups.
Before it’s here, it’s on Smartkarma
