The SAAS business is being fueled by a crop of newcomers who make the industry more efficient. Back in the old days, CRM had to wing it and figure the shit out for themselves. Nowadays, there are software applications for just about everything. They A/B test the size of people’s cocks and cross reference that data against % chance of cross sells.
Essentially, it is growth hacking by manipulating the human psyche.
On the customer service front, no one is hotter than ZEN now. I bought the stock, not so much for a quick spin higher, but for the eventual acquisition.
I have three stocks in my active account that should be acquisition targets: SHAK, FIZZ, and ZEN.
All of the other shit is fleeting, gambler type positions designed to keep my degeneracy in check.
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NFLX lemmings are thrashing my trading account. It has just been crowned the Entertainment King, surpassing Disney in market cap.
NFLX Revenue: $12.8B
DIS Revenue: $14.1B
Hmm, I guess you are saying, “Well, NFLX is growing faster, so it should be woirth more.” Based on those numbers above, I’d agree. But I lied. Try these numbers:
NFLX Revenue: $12.8B
DIS ***profit***: $14.1B
That’s right: if NFLX had no salaries, no licensing fees, no production cost, no marketing costs, no debt payments, etc, **DIS woudl have still made more profit**
Literally, only idiots and gamblers would own NFLX stock right now (although the arguement could be made that only fools would short it based on the price action). Most times, I’m quite happy that others are several deviations less intelligent than myself, but it’s times like these when I wish they weren’t.
SHAK looks very shady corporate structure Besides mamking the actual profit numebnrs opaque, that complicates any deal for a potential buyer.
https://seekingalpha.com/article/3980418-shake-shacks-financial-shenanigans
ZEN looks like a good company. It has good cash flow. The problem is that the profit goes to employees, not investors: every quarter, more than 25% of gross revenue – not 25% of net income – is rewarded in share-based compensation to its employees. That makes a very high bar to achieve for profitablity, one that ZEN has not yet been able to hurdle (negative net income every quarter). It’s an admirable way of running a company (depending on how those sahres are distributed…), but less profitable for investors.
Nonsense
On SHAK, I’m just a messenger.
On ZEN, just because it doesn’t makse sense to you doesn’t mean it doesn’t make sense. However, whether it makes cents for investors is a different story, TBD.
I did double check, and it has come down to 20% in more recent qaurters, so at least they are improving. They aren’t a big company, so it is possible that they grow past it. I’d buy ZEN over NFLX without hesitation
“but less profitable for investors.” Do they agree?
Check out TTD, they are a basically saas for the ad industry. It’s ran quite a bit recently but high level it’s a play on advertising getting more efficient and the growing power of the FB / GOOG duopoly. They’ve been crushing numbers, and I think the street is way too low… especially on multi year basis. They trade cheaper than all the Saas guys but have better growth. It’s ad tech so it gets a terrible rep, but it’s a sticky and critical software product and it’s a much better business than the street believes (literally nothing like the other ad tech blow ups). The big driver right now is growth in the amount of ads to sell from video products like sling TV and Hulu – spending here was up 21x (!) y\y in 1Q for TTD. I fully expect most TV ads to start being sold digitally because the targeting is so much better and it’s a lot more efficient and flexible. TV is like a $180B ad market that TTD is about to attack and it’s going to be a 10 year secular story. There’s nothing in most estimates for this. Also google just shut down use of its User ids for use on stuff outside its products and TTD offers one of the next biggest user data bases so that will lead to share gains in its existing market. I’ve done a lot of work and talked to a lot of people throughout the supply chain… their customers love it, they are getting more locked in every day and rollout new features like no one else in the space. I could see it going lower just from the huge move, but I will be buying aggressively into any weakness.