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lol cope with ur losses beach! Using the google AI - The evidence on whether stock-based compensation (SBC) motivates employees is mixed and inconclusive, with studies supporting both positive and negative/neutral effects. The outcome often depends on the type of SBC, the employee's role, the company's culture, and broader economic factors.
Moronic example, Google is notoriously shit motivating and retaining top tier talent for a variety of reasons. And one of them is they pay less SBC than other tech companies You couldn’t pick a more regarded example and somehow still get it wrong
What u mean doomer shit all I said is u don’t know how SBC works - I did not express an opinion on the stock regard
Nvidia has made more employees millionaires than any other by far, the fuck are you saying? They can recruit the best of best because of their SBC. Companies who just pay salary lose their best people, this shit has been proven countless times Zoom out on the chart, I first bought into nvdia two splits ago. wtf have you been doing?
Funnily enough it would probably have been massively value accretive if they took on debt to pay their employee bonuses; dont get me wrong, that sounds ludicrous and is not something I'd have been amused by as a NVIDIA shareholder in say 2019. But even more funnily, that would've destroyed way less value than what they ended up doing. A A prudent reminder to always deduct SBC from FCF to estimate the cash that can be returned to shareholders via dividends/buybacks ***while being actually accretive on a per share basis.***
That is not how it works lol u don’t know what SBC js
Not that huge, but maybe ~25% higher. Well, without having done any forensic accounting, I think it comes to the fact that shares have appreciated wildly since they were issued and they are now aggressively buying back shares at an elevated valuation. It’s value desctructive. P/(GAAP)E correctly accounts for SBC; the buybacks appear on the cash flow statement. Assuming the share price permanently stays at this level or goes higher from here, the buybacks are not value destructive in hindsight – arguably, the share issuances were – but if the price declines, the buybacks will prove to have been value destructive.
Pro-tip if you find yourself harping about SBC and dilution you have likely suffered from thesis drift and should cut your losses.
So they bought back stock to offset SBC and that didn’t help shareholders?
Michael Burry is trying so hard to crash NVDA. He is showing something related to how NVDA is manipulating the investors. **Since the beginning of 2018, NVDA earned about $205B net income and $188B free cash flow, assuming all cap ex was growth cap ex. SBC amounted to $20.5B. But it bought back $112.5B worth of stock and there are 47 million MORE shares outstanding. The true cost of that SBC dilution was $112.5B, reducing owner's earnings by 50%. /rant**
The edge here is dissecting quality of earnings and traffic/customer concentration for GAMB, then sizing the bet like it’s fragile. Actionable checks I’d run: 1) Footnotes on revenue: split of CPA vs rev-share, receivables aging, and credit risk by customer; if two sportsbooks are >30% of revenue, that’s a red flag. 2) Traffic durability: pull Similarweb and Semrush trends, separate brand vs non-brand organic, and model a Google core update hit (say -20% organic) against EBITDA. 3) Cash conversion: OCF vs net income after SBC, earnout payments, capitalized content/intangibles, and amortization; see if “beats” rely on adjustments. 4) Regulatory sensitivity: state promo caps and UK/EU changes; note seasonality (NFL). 5) Dilution/insiders: shelf filings, RSU overhang, insider sales. Set tripwires (e.g., non-brand organic down 15% QoQ or any client >35% rev) to cut size. For idle cash while waiting, I use Fidelity T-bill ladders and Marcus for HYSA; I’ve also used Gainbridge for a fixed-term annuity when I wanted a multi-year guaranteed rate. Bottom line: judge earnings quality and traffic fragility first, then keep position small with clear exit triggers.
Jesus all of your strikes are so high and expirations so near term. I’m sitting on Sept 2026 670 C that took hits, but slowly buying the dip. Last few days it drops -2% to -3% and recovers as market closes. Gotta give Zuck a few months to ensure share price and SBC stays competitive
FCF - SBC is currently negative. Perhaps instead of spending money like crazy they should return capital instead in the form of a dividend. The "Oh, but they're reinvesting for growth" narrative is never quantified. The longer it takes to see meaningful FCF, the greater it has to be, as future cash flows are discounted.
FCF- SBC is what matters and it’s not so hot for Meta.
Thanks to all those who engaged with my rough draft of my base case scenario, and thanks to those who called me a retarded moron. I now want to start crowdsourcing feedback on my bull case, and a trigger warning for the trolls out there - it is bullish. *For context on how I see AGI impacting Nebius's outlook, and some more qualitative thinking behind these numbers, please check out my longer form thoughts here:* [https://rootcapital.substack.com/p/nebius-q3-results-and-are-we-in-a](https://rootcapital.substack.com/p/nebius-q3-results-and-are-we-in-a) https://preview.redd.it/45cquiuh591g1.png?width=2656&format=png&auto=webp&s=43000caf25a2eb7a40ce60c7233e486f8de7fe0b [](https://preview.redd.it/nebius-2030-the-art-of-the-possible-v0-kzgcub1h491g1.png?width=2638&format=png&auto=webp&s=20da8542680fca8a63325c2e052534b63b22a558)The valuation assumes: * **4GW Active Power by 2030** (management has hinted at securing more contracted power, in this model I assume we contract an extra 1.5GW, and bring it online by 2030.) * **Deprecation as a % of revenue tapers hard** \- this reflects the fact that older GPUs aren’t useless - they simply move down the value chain. Nebius can still monetise them on inference for years beyond the four-year accounting life. Sure, they can't be used for training, but they will be used for lower complexity inference tasks. * **Net margin expands to 17%**, in line with the likes of AWS in the present day. Nebius's head start as an AI native cloud platform pays dividends, and it becomes one of the go to providers for AI workloads. (Customer mix is not hyperscalers, but more ad-hoc workloads from mid-caps). * By 2027, the business is producing **enough cash to scale without repeatedly tapping shareholders for more dilution**. It still accounts for modest SBC, but no 25 million share sales. Feedback of course is welcome, but please remember this is a bull case for a reason. You can check out my earlier base case if you want the conservative view, but this is optimistic for a reason.
IXHL filings on 11/14/25 show three things: * Form 4: CFO got 869k restricted shares. No selling. * 10-Q: Cash jumped to $73M after earlier raises. Burn ~9M/quarter. Balance sheet clean, no debt overhang, no bad surprises. R&D down from timing, G&A/SBC up. * S-8: Registers 69.5M shares for the equity plan (evergreen). Not a raise, not immediate dilution. ** Reverse split: No mention, no plan, no hint anywhere in the filings.
CRWV is worth 0. They are essentially an off book shell company for NVDA to dump GPUs and for other hyperscalars to rent/lease compute for. They will never be profitable. Their balance sheet is so fucking atrocious its a miracle they were able to even IPO. Oh wait, their IPO almost failed and only succeeded because NVDA backed it, who already had invested in it, and funds them so they can buy chips back from NVDA. Oh, and CRWV uses their GPUs as collateral for debt, which they are doing BS depreciation on to overstate the value. And I bet you that CRWV is using the same GPUs as collateral for multiple loans. And dotn even get me started on their SBC. They are a 0 and will be in ch7 or ch11 the second there is a hint of slowdown in the AI mania
CRM true P/E is around double what's advertised due to massive amounts of SBC
A modestly better quarter from Curaleaf with results ahead of expectations, modest growth, and some margin expansion, although underlying cash flow generation and balance sheet quality remain entirely reliant on their challenge of 280e obligations. The domestic business stabilized after several quarters of declines while the international business continues to grow (up 12% QoQ and 55% YoY) to $46M (the largest of any cannabis operator). Similar to others, their uncertain tax position is rapidly ballooning (now $510.2M) and their $95.3M in reported YTD operating cash flow is actually negative when you factor in those unpaid 280e taxes making the legal challenge top-of-mind. Looking ahead, Cura should continue to see growth in the international segment while the domestic business has few immediate catalysts outside of growth in NY and select store openings. Full review: **Revenue:** QoQ: $314.5M to $320.2M / YoY: $330.5M to $320.2M *Up 1.8% sequentially and down 3.1% YoY was better than expected ($317M), as the US business held stable while the international business grew 12% sequentially and 55% YoY to $46M. Cura opened 4 new stores during the quarter (2 in OH and 2 in FL), stared an MSA with a Maine store, and acquired the remaining ownership in Cura International (now 100% owned).* **Adjusted EBIDTA:** QoQ: $65.5M to $69.3M / YoY: $75.3M to $69.3M *Up 5.8% sequentially and down 8.0% from last year was also ahead of expectations ($66M), with margin up to 21.6% in Q3 from 20.8% last quarter (although down from 22.8% last year). Still behind most Tier 1 peers but good to see improvement.* **Gross Margins:** QoQ: 48.5% to 49.9% / YoY: 48.6% to 49.9% *Nice improvement here at a good level as management highlighted efficiency improvements.* **Operating Expenses:** QoQ: $149.3M to $155.7M / YoY: $151.3M to $155.7M *Increase here sequentially and YoY largely due to higher SG&A and SBC, offsetting margins gains to an extent.* **Operational Cash Flow:** QoQ: $6.7M to $4*8.4*M / YoY: $40.3M to $48.4M *As always, have to look at tax payments dynamics for proper read through. Adjusting for unpaid taxes, OCF was -$8.2M in Q1, -$20.3M in Q2, and +$9.4M in Q4 for -$19.1M YTD. CapEx spend was $16.6M and now $47.9M YTD.* **Cash:** QoQ: $102.3M to $107.5M / YoY: $90.0M to $107.5M *Positive OCF offset CapEx spend. Cura also paid down some debt with a new credit facility. Debt stands at $543.7M, Income tax payable of $19.9M, and now an uncertain position of $510.2M*
their ceo bought 300k this company does 200 million usd of SBC a year, CEO has 50 million usd of stock as is. That's cool he's fucking with algos but it doesn't really tell you anything about what he thinks about the business
A steady Q3 showing for Cresco as revenue stabilized sequentially (although down quite a bit YoY), while margins were largely stable slightly ahead of expectations. Minimal cash generation limits the company's ability to play offense, although they do have small pockets for growth (new stores in OH, Kentucky cultivation launch, and product launch in Germany) while larger AU catalysts in Florida and Pennsylvania remain uncertain. FYI- Waiting on the full financials to be released to get cash flow dynamics still. Full review: **Revenue:** QoQ: $163.6M to $164.9M / YoY: $179.8M to $164.9M *Up slightly sequentially but down 8.3% YoY, just head of expectations ($164M). Cresco opened 1 new store in OH during the quarter and initiated cultivation in Kentucky, and also highlighted a product launch in Germany for their first foray into international markets.* **Adjusted EBIDTA**: QoQ: $40.9M to $39.8M / YoY: $51.3M to $39.8M *Down slightly sequentially and a significant 22.4% from last year, although this was better than consensus of $37M. Margin drops to 24.1% here from 25.0% last quarter and 28.5% last year. $4.4M in one-time costs, $2.4M in impairments, and $2.3M in SBC removed from this figure.* **Gross Margins:** QoQ: 50.9% to 48.1% / YoY: 52.0% to 48.1% *Down sequentially and YoY although still at a relatively solid level.* **Operating Expenses:** QoQ: $57.9M to $59.2M / YoY: $64.8M to $59.2M *Note i removed impairments to compare apples to apples. Up a bit sequentially but nicely down from last year, much needed considering top-line declines.* **Operational Cash Flow:** QoQ: $8.8M to $6.2M / YoY: $49.4M to $6.2M No financial statement yet so have to wait to see what tax dynamics look like. **Cash:** QoQ: $146.6M to $78.7M / YoY: $156.6M to $78.7M *Again waiting on the financial statements for exact dynamics but looks like OCF and CapEx largely offset each other, and then the big drop in cash came from a debt refinancing where they retired their old $360M facility while raising a $325M new term loan.*
A steady Q3 showing for Cresco as revenue stabilized sequentially (although down quite a bit YoY), while margins were largely stable slightly ahead of expectations. Minimal cash generation limits the company's ability to play offense, although they do have small pockets for growth (new stores in OH, Kentucky cultivation launch, and product launch in Germany) while larger AU catalysts in Florida and Pennsylvania remain uncertain. FYI- Waiting on the full financials to be released to get cash flow dynamics still. Full review: **Revenue:** QoQ: $163.6M to $164.9M / YoY: $179.8M to $164.9M *Up slightly sequentially but down 8.3% YoY, just head of expectations ($164M). Cresco opened 1 new store in OH during the quarter and initiated cultivation in Kentucky, and also highlighted a product launch in Germany for their first foray into international markets.* **Adjusted EBIDTA**: QoQ: $40.9M to $39.8M / YoY: $51.3M to $39.8M *Down slightly sequentially and a significant 22.4% from last year, although this was better than consensus of $37M. Margin drops to 24.1% here from 25.0% last quarter and 28.5% last year. $4.4M in one-time costs, $2.4M in impairments, and $2.3M in SBC removed from this figure.* **Gross Margins:** QoQ: 50.9% to 48.1% / YoY: 52.0% to 48.1% *Down sequentially and YoY although still at a relatively solid level.* **Operating Expenses:** QoQ: $57.9M to $59.2M / YoY: $64.8M to $59.2M *Note i removed impairments to compare apples to apples. Up a bit sequentially but nicely down from last year, much needed considering top-line declines.* **Operational Cash Flow:** QoQ: $8.8M to $6.2M / YoY: $49.4M to $6.2M No financial statement yet so have to wait to see what tax dynamics look like. **Cash:** QoQ: $146.6M to $78.7M / YoY: $156.6M to $78.7M *Again waiting on the financial statements for exact dynamics but looks like OCF and CapEx largely offset each other, and then the big drop in cash came from a debt refinancing where they retired their old $360M facility while raising a $325M new term loan.*
A steady Q3 showing for Cresco as revenue stabilized sequentially (although down quite a bit YoY), while margins were largely stable slightly ahead of expectations. Minimal cash generation limits the company's ability to play offense, although they do have small pockets for growth (new stores in OH, Kentucky cultivation launch, and product launch in Germany) while larger AU catalysts in Florida and Pennsylvania remain uncertain. FYI- Waiting on the full financials to be released to get cash flow dynamics still. Full review: **Revenue:** QoQ: $163.6M to $164.9M / YoY: $179.8M to $164.9M *Up slightly sequentially but down 8.3% YoY, just head of expectations ($164M). Cresco opened 1 new store in OH during the quarter and initiated cultivation in Kentucky, and also highlighted a product launch in Germany for their first foray into international markets.* **Adjusted EBIDTA**: QoQ: $40.9M to $39.8M / YoY: $51.3M to $39.8M *Down slightly sequentially and a significant 22.4% from last year, although this was better than consensus of $37M. Margin drops to 24.1% here from 25.0% last quarter and 28.5% last year. $4.4M in one-time costs, $2.4M in impairments, and $2.3M in SBC removed from this figure.* **Gross Margins:** QoQ: 50.9% to 48.1% / YoY: 52.0% to 48.1% *Down sequentially and YoY although still at a relatively solid level.* **Operating Expenses:** QoQ: $57.9M to $59.2M / YoY: $64.8M to $59.2M *Note i removed impairments to compare apples to apples. Up a bit sequentially but nicely down from last year, much needed considering top-line declines.* **Operational Cash Flow:** QoQ: $8.8M to $6.2M / YoY: $49.4M to $6.2M No financial statement yet so have to wait to see what tax dynamics look like. **Cash:** QoQ: $146.6M to $78.7M / YoY: $156.6M to $78.7M *Again waiting on the financial statements for exact dynamics but looks like OCF and CapEx largely offset each other, and then the big drop in cash came from a debt refinancing where they retired their old $360M facility while raising a $325M new term loan.*
It didnt kill earnings they had high cost Positive Revenue +100% YoY to $1.27B Adj. EBITDA $742M, +177% YoY Net income $556M, +271% YoY Gold subscribers 3.9M, +77% YoY Total Platform Assets $333B, +119% YoY Negative Total operating expenses $639M, +31% YoY Adjusted OpEx + SBC outlook increased to ~$2.28B for 2025
Damn 5% down AH i Positive Revenue +100% YoY to $1.27B Adj. EBITDA $742M, +177% YoY Net income $556M, +271% YoY Gold subscribers 3.9M, +77% YoY Total Platform Assets $333B, +119% YoY Negative Total operating expenses $639M, +31% YoY Adjusted OpEx + SBC outlook increased to ~$2.28B for 2025
Solid Q3 showing from Trulieve: revenue was in-line with expectations considering the seasonally weaker quarter in AZ/FL while margins came in nicely above expectations. The FL machine continues to operate at a high caliber despite price declines and increased competition in the state, as the company again leads the charge on spending ahead of another AU initiative in the state ($34M spent YTD). The cash flow profile and balance sheet continue to be dictated by their ongoing challenge of 280e with strong press release numbers and now an indication to pay down the majority of their debt in Q4, but alongside significant unpaid taxes that continue to accumulate under the UTP (now $616M). Looking ahead, few changes on the horizon for most of their core markets with potential for adult-use in FL/PA although certainty on those states remains murky. Full review: **Revenue:** QoQ: $302.1M to $288.2M / YoY: $284.3M to $288.2M *Down 4.6% QoQ and up 1.3% YoY, in-line with analysts consensus of $288M during the seasonally weaker Q3 in FL/AZ. Trulieve opened 1 new store in OH during the quarter, and relocated 1 AZ store so largely working off the same base.* **Adjusted EBIDTA:** QoQ: $110.6M to $102.7M / YoY: $96.1M to $102.7M *Down 7.1% sequentially but up 6.9% YoY, nicely ahead of expectations of $96M. Industry-leading margins remained strong at 36% in the quarter, down from 37% in Q2 but up from 34% last year. Note that 6.3M in campaign contributions (now $33.7M YTD), $8.8M in one-time costs, and $5.8M in SBC were removed from this figure.* **Gross Margins:** QoQ: 61% to 59% / YoY: 61% to 59% *Down slightly QoQ and YoY but still at very strong levels.* **Operating Expenses:** QoQ: $130.3M to $127.6M / YoY: $172.7M to $127.6M *Nice cost control sequentially and a big drop YoY (largely due to a $48M campaign expense last year). Removing the campaign expenses, OpEx was $121.3M here compared to $125.9M in Q2 and $124.3M last year.* **Operational Cash Flow:** QoQ: $86.1M to $76.8M / YoY: $30.3M to $76.8M *Good headline number but always have to factor in unpaid taxes. Tax-adjusted OCF was +$20.2M in Q3 and now $+42.5M YTD ($76.2M if you factor out the campaign contributions). This compares to +$37M in the first 3 quarters of 2024 and +$99.7M if you factor out campaign contributions so actually down this year apples-to-apples. CapEx was $12.3M in the quarter and $40.8M YTD so just above break-even on FCF when factoring in unpaid taxes.* **Cash:** QoQ: $392.6M to $449.2M / YoY: $238.8M to $449.2M *Cash rise continues driven by positive OCF, although the uncertain tax position along with it. Debt stands at $477.5M with Trulieve indicating they will pay off $368M of notes in December. The uncertain tax position now stands at $616.3M and will continue to rise*
$S is definitely moving like CRWD did back in its early scaling phase. Market’s sleeping on how fast their margins flipped and how sticky that ARR growth is. Only caution; watch SBC and cash flow trends next couple quarters; that’s what’ll decide if the rerate actually sticks.
Look at FCF - SBC. Big Tech is a lot more expensive than it looks. Also, why are we comparing Big Tech to Dot Com startups? Big Tech is much more comparable to the Four Horsemen of the Dot Com bubble: Dell, Cisco, Microsoft, Intel. These companies were all very profitable and ushering in a new era of mass communication. Their stocks still fell dramatically. The equivalent of Dot Com startups are all the unprofitable shitcos around now, and there are plenty of them. A bubble doesn’t have to be an exact repeat of the past to be very similar in spirit and absolutely still a bubble.
Look at FCF - SBC, not net income.
Forward estimated PE is around 15 and even adjusted for SBC the free cash flow yield still sits at around 5%. Nothing in the numbers are signaling stagnation in growth (which the current valuation suggests). In this current market with high valuations adobe is looking like a low risk stock with a likely decent upside. I doubt investors will lose money on this stock when looking back at todays price of 350$ in the end of 2026.
P to FCF - SBC is a stupid metric Completely uncorrelated with returns.
When SBC is 63% more than your R&D costs you’re not a company, you’re a compensation mechanism masquerading as a company.
R&D was 420m in q1. They could simply cut that instantly if they wanted. That's without talking about cutting SBC which they've been progressively doing, monetizing storage which is one of their big costs etc.
There is no lie that is constantly spread that is more pernicious than this: u/NationalTranslator12 >Oh yes, the myth of the "cash on the sidelines". If I have "cash on the sidelines" and I buy assets from you, you now have that same "cash on the sidelines". Cash does not disappear, it moves hands. The amount of cash does not depend on assets being cheap or expensive. I can't believe how many people parrot misinformation like this. What they are saying is only true in an instant of time under a very specific constraint: * A stock is being sold from one investor to another investor with cash. In reality, shares are issued CONSTANTLY in the form of SBC. Options, RSU, unvested shares becoming vested. This is not just cash sitting there. This is salary and compensation that gets spent. This is even more true if a company does a shelf offering. Newly available cash from equities is often absorbed by newly issued corporate debt as well. All of this money goes directly back into the economy, it doesn't go back to MMFs necessarily. If a company is doing buybacks, the opposite is true. Shares are being fully retired and the cash pile *gets larger*. But it is definitely not the case that the cash pile getting larger means nothing or that it is not available to buy dips.
There is no lie that is constantly spread that is more pernicious than this: u/NationalTranslator12 >Oh yes, the myth of the "cash on the sidelines". If I have "cash on the sidelines" and I buy assets from you, you now have that same "cash on the sidelines". Cash does not disappear, it moves hands. The amount of cash does not depend on assets being cheap or expensive. I can't believe how many people parrot misinformation like this. What they are saying is only true in an instant of time under a very specific constraint: * A stock is being sold from one investor to another investor with cash. In reality, shares are issued CONSTANTLY in the form of SBC. Stock options, RSU, unvested shares becoming vested. This is not just cash sitting there. This is salary and compensation that gets spent. This is even more true if a company does a shelf offering. Newly available cash from equities is often absorbed by newly issued corporate debt as well. All of this money goes directly back into the economy, it doesn't go back to MMFs necessarily. If a company is doing buybacks, the opposite is true. Shares are being fully retired and the cash pile *gets larger*. But it is definitely not the case that the cash pile getting larger means nothing.
Their SBC is quite high but not that bad, it only looks bad because you're seeing the share count increase whereas their peers with comparable SBC do enough buybacks to shrink the float. The difference with Amazon is they can't afford buybacks because they're reinvesting so much cash. Personally, I'll take the bet that they're reinvesting that cash effectively like they always have done.
Amazon is a great for employee compensation via SBC but no so great for shareholders. I started buying AMZN over 10 years ago when it was around $500 pre-split but at this point I'd rather buy Google, MSFT, Apple, Nvidia and maybe even Meta as those companies are actively reducing shares outstanding.
The issue with Amazon is their SBC as their shares outstanding keep going up diluting shareholders and lack of buybacks. At least most of the other big tech companies are reducing share count.
Forward P/Es are nonsense when expectations are unrealistically high and analysts can’t even accurately forecast one quarter ahead. If you look at FCF - SBC, the story is very different for Big Tech. They’re not reasonably priced at all if the return on all that capex isn’t there.
SBC as a percentage of revenue has declined precipitously over the years. However, it is still too high. One of the main issues, though, is their margins are too low. Their infrastructure bills are very high, and they could probably save a ton of money and goose the margin if they could negotiate better rates. Their contract comes up for renewal in ‘27. Alternatively, they could form a partnership with a big tech company and used their scaled-up infrastructure in exchange for maybe allowing data access? Lots of low hanging fruit for them to pick.
Stole this from someone on X. Not exactly what you’re looking for but it is extremely thorough: “You are an equity research analyst. Produce a rigorous, source-backed investment memo on {Company} [{Ticker}] with a clear Buy, Hold, or Sell call. Rules for research and writing 1) Use only verifiable, recent sources. Prioritize official filings, earnings materials, investor presentations, regulatory documents, reputable industry data, and high quality media. Cite every non-obvious fact with a link and date. 2) Separate facts from interpretation. Tag each paragraph as Fact, Analysis, or Inference. 3) Use precise dates. Avoid vague time references. 4) Quantify claims. Show math for derived metrics. Use tables where helpful. 5) Note uncertainty. Call out missing data and state assumptions. Deliverables A) Executive summary (8 to 12 bullets): snapshot, thesis, rating, price targets and time frames, key drivers, key risks, near-term catalysts, and what would change the call. B) Full memo with sections 1 through 15 below. C) Appendix: source list with links and dates, data tables, and a simple operating model. 1) Thesis framing (purpose: define what must be true to create value) - State the core investment question in one sentence. - List 3 to 5 thesis pillars that would make the stock attractive. - List disconfirming evidence to test that could break the thesis. 2) Market structure and size (purpose: size the prize and trajectory) - Quantify TAM, SAM, SOM. Segment by product line, customer size, industry, and geography. - Identify growth drivers: regulation, replacement cycles, macro activity, technology adoption. - Estimate current penetration and runway. Compare against peer adoption curves. 3) Customer segments and jobs to be done (purpose: map who buys and why) - Describe mix by size band and industry. Identify buyer roles and budget owners. - Detail core workflows and pain points. Explain mission criticality. - Assess switching costs and vendor lock-in by segment. 4) Product and roadmap (purpose: evaluate product-market fit and durability) - Summarize core modules and adjacent products. Call out differentiators. - Compare depth vs breadth versus best point solutions. - Explain implementation time, integrations, configurability, and typical time to value. - Provide quality and reliability signals: uptime, incident history, mobile performance. - Roadmap credibility: stated milestones versus delivery track record. 5) Competitive landscape (purpose: position the company) - Identify direct and indirect competitors by segment and size. - Compare pricing, packaging, and feature gaps. Include switching friction and contract terms. - Summarize win or loss reasons from reviews, case studies, and disclosed data. 6) Go-to-market and distribution (purpose: test scalability of new-logo engine) - Break down demand sources: inbound, outbound, partner referrals, marketplaces. - Sales productivity: ramp, quota attainment, conversion rates where disclosed or inferred. - Role of channels and partnerships: integrations, OEMs, platforms. - Services and customer success model. Training and community as moat. 7) Retention and expansion (purpose: quantify durability of revenue) - Report gross and net dollar retention by cohort and segment if disclosed or estimable. - Explain logo churn drivers and timing. Provide a churn curve if possible. - Identify expansion vectors: seat growth, module attach, usage-based add-ons. - Discuss contract length, renewal mechanics, and price increase policies. - Include reference-call insights or credible review synthesis. 8) Monetization and embedded finance if applicable (purpose: understand usage economics) - Revenue streams and pricing model. For payments or fintech: share of customers active, GTV penetration, take rate by tender type, blended margin, cost stack, fraud exposure, and who holds credit risk. - Revenue recognition: gross vs net. Seasonality and cyclicality. - ARPU uplift from usage products. Payback on onboarding. 9) Unit economics and efficiency (purpose: test scalability with profitable growth) - CAC, payback period, magic number, LTV to CAC by segment if available or estimable. - Contribution margin by line: software vs usage vs services. - Cohort profitability and cash contribution over time. - Implementation and support cost over customer lifetime. 10) Financial profile (purpose: link operations to financial outcomes) - Revenue mix and growth by component. Gross margin by line. Operating leverage path. - Rule of 40 and efficiency trends. GAAP to cash flow bridge. - Leading indicators: billings, RPO, backlog. - SBC, dilution, and share count trajectory. - Liquidity, working capital needs, and path to FCF breakeven and target margin. 11) Moat and data advantage (purpose: assess defensibility) - Workflow depth and data lock-in. Network or ecosystem effects if present. - AI or analytics differentiation with measurable outcomes. - Integration footprint and practical switching costs. 12) Execution quality and organization (purpose: evaluate management and operating cadence) - Leadership track record and stability. Org design and succession. - Engineering velocity: release cadence, defect and incident rates where available. - Customer sentiment: CSAT, NPS, peer review sites, and community signals. 13) Risk inventory and mitigants (purpose: make downside explicit) - Macro, regulatory, competitive, operational, and concentration risks. - Payments, credit, or compliance risks if relevant. - Implementation complexity and time-to-value risks. - For each risk, propose leading indicators and mitigations. 14) Valuation framework (purpose: value with cross-checks) - Public comps table: growth, gross margin, operating margin, Rule of 40, EV to revenue, EV to gross profit. Normalize for any usage or payments reporting differences. - DCF with explicit drivers and sensitivity bands. - Cross-checks: cohort NPV math, S-curve adoption, unit economics to enterprise value sanity checks. 15) Scenarios, catalysts, and monitoring plan (purpose: set expectations and triggers) - 12 to 24 month bear, base, bull cases. Specify NRR, new logos, pricing or take rate, margins, SBC, and share count. Assign probabilities that sum to 100 percent. - Near-term catalysts: product launches, pricing changes, partnerships, market entries, M&A, regulatory outcomes. - Early warning indicators: churn spikes in small cohorts, backlog slippage, uptime incidents, pricing pushback. - What would change my mind: three positive and three negative triggers. Output format - Executive summary - Rating with price targets and time frames - Investment thesis and variant perception - Detailed sections 1 through 15 - Tables and charts embedded - Source list with links and dates - Appendix with model assumptions and calculations Quality bar - No generic claims. Back important statements with numbers and citations. - Label any speculation as Inference. - Be concise and structured. Prefer bullets and tables.
Ported my 10x GME it into PLTR at $29 then watched it drop back to $15. PLTR is in my wheelhouse professionally (head of corp dev in enterprise software). My biggest dollar loss and it was entirely preventible. I knew the metrics, liked what I saw, and liked the future. I felt I was getting taken advantage of with dilution and SBC and got mad at leadership and left. Stupid patience, I need to fricken learn a bit of it. Still hurts.
Till next quarter. Then SBC going to fuck you up lol
I'm not an expert on this company, but just glancing through through their financials it seems kind of weird that they aren't profitable on a GAAP basis (i.e. positive net income). They're staying solvent via SBC, which is giving them positive cash flow. But looking at the income statement, I don't get the massive expense numbers for SG&A and R&D. In particular, on the SG&A expense, why are they spending so much to generate a dollar of sales? I could be wrong, but it seems likely to me that they could do some internal cost cutting and start operating at a profit, and cut down on the SBC as well.
Evan Spiegel has been using SNAP investors as a piggy bank since day 1. He has too much control and no one can stop him due to the structure of the holdings. He is greedy and the stock based compensation at the company is also OUT of Control. He needs to be shown the door and the next CEO shouldn’t become a billionaire by being granted hundreds of millions in SBC. These greedy CEO’S. Karp was doing the same thing with PLTR.
SBC going to cook investors again
Point 3 doesn't really work like that. E.g. MSFT hasn't done a direct offering recently, perhaps since IPO. Last year they had $12B in stock based compensation with $17B in stock buybacks. To the extent a rising stock price helps incentivize mgmt and key employees, that is good. But SBC is really a non cash expense so it shows up in P&L but added back in cash flow. You can say a strong stock price allows a company to have a currency to make better acquisitions, but MSFT can't really buy much of anything these days. Sometimes, like NFLX back in the day, companies leveraged their stock price in their debt borrowing via convertible notes, so that's a decent use case. Overall, there isn't a direct flow from additional capital in secondary markets to internal uses of capital. Theoretically there is via more capital in secondary markets --> more liquidity --> lower liquidity premium --> lower cost of equity --> lower credit spreads in debt markets --> lower overall WACC. But that probably works best for small highly illiquid stocks to begin with that aren't part of standard indexes that get regular flow.
You could release it once every decade, it wouldn't change much in long term planning, people would just frontload bonuses etc and spend the rest of the time getting it back, except now markets would be hyper inefficient because financial models do better with more data End result being that you wouldn't know if a company is burning too much cash or giving too much in SBC until a bankruptcy hit you out of the blue The only real way to force long term plans is to cap bonuses relative to tangible GDP effect, and even that is not airtight
huh? DKNG is profitable and cash flow positive just by one look at their financial statements. that’s also including SBC
CHWY has no moat, operates in a competitive market, and has a 2% net income margin. They also have one of the highest-paid CEOs on the planet and love to dilute their shareholders with continued SBC.
SoFi is the only Fintech bank that combines a Charter bank, a Financial technology payment processing platform, and Cyberbank Core capabilities. A great portion of its revenue is from fee services. It has acquired different companies throughout the years to become the most diversified Fintech Bank. It is not here to play the catch-up game, and acquisitions are the most efficient and fastest way to get crucial items on board. It'll take years to build them in-house if it is even possible. The first to dominate all the functions/products will be the winner, and the winner takes most. It is probably the fastest growing Fintech Bank in US. The CEO is motivated to reach a $45 (90-day average) target PBC (Performance-Based Compensation) by June 1, 2026, to earn over $289 million in SBC.
Can't remember who put Kelly Partners Group (KPG.AX/KPGHF) on my radar ( u/_hiddenscout? ) but I'm finally ready to pull the trigger. They roll up smaller accounting firms into the larger, more efficient business. Their trademarked Partner-Owner-Driver (yes, they actually trademarked the phrase) is where KPG buys 51% interest in the operating business while the operating partner(s) retain 49%. KPG targets smaller accounting firms that primarily service small- and medium-sized businesses, generally firms generating in the range of A$1MM - A$3MM. They never use shares to buy companies and pay no SBC so dilution never occurs. Generally, the companies they purchase thrive with access to the technology, marketing, and other shared resources the parent company can offer. Through 2022 they focused only in their home country of Australia. However, in 2023 they purchased their first US-based firm and in 2024 they purchased 50.1% of Kudos International, which was itself a sort of roll-up company as they had 55 firms across 48 countries. This all has led to non-Australia revenue going from A$582,000 in FY2023 to A$21MM in 2025. Anyway, thanks to whoever put this on my radar many months back. It was a fun deep dive and I think it'll be a long-term market beater for me.
Snap is paying currently $1B/year in SBC, and it's only got a market cap of $12B. It's gotta come from somewhere, and that somewhere is your pockets.
SBC and head counts are two major issued within the company. Not sure if the CEO even cares
look at the SBC of this piece of shit company - you might as well just give your money to their founders instead of buying the stock, its the same thing at this point.
Good call OP. Declining revenues. Flat vehicle sales. Declining profitability. Increasing shares outstanding. 40% SBC. 177x FWD PE. 0.3% FCF Yield. 6% profit margins. BUT, Elon said they will be worth $6T and he will create humanoid robots and eventually have a (driverless) robotaxi network ... maybe, once they get the tech figured out. What could go wrong?
No it's not, period. Your understanding of SBC is fundamentally flawed. Buying back shares reduces equity and concentrates company value onto fewer shares. It's a payout to shareholders, a dividend payout without tax if you will. Your %ownership of the company goes up. It also reduces equity and therefore increases ROE/ROCE "It's a EPS lever" is a very dumbed down way of looking at it.
SBC is a non-cash expense. You should consider the dilutive effect, but not count SBC as a cash expense. Shares outstanding are declining with CRM as well and they announced an increase of their share buyback program.
so SBC is just not an expense these days? cause its not deducted from FCF
I've started doing some DD and I'm pretty interested in Warby Parker. Accelerating revenue, FCF positive, doesn't dilute via SBC too much, investing heavily in retail presence which, for glasses, makes a lot of sense for obvious reasons. They have essentially no international presence yet (271 US stores, 5 in Canada, that's it). Announced a partnership with Google in May for AI-powered glasses. Current valuation has it at it's all-time P/S and P/GP average but it's trading well above the 3Y averages. Will have to dig more but may be worth a starter position at least. Anyone own/have thoughts?
Either an acquisition target, an acquisition rumor, improved fundamentals/less SBC, etc. lots of catalysts and this will have a quick bounce back up in the next year
Don't worry. SNOW will dilute their shareholders with SBC like they always do
The amount of stock based compensation they issue is obscene. Nearly a quarter of their revenue goes towards SBC. Shareholder dilution is real too
My Ski Trip with Alexander Karp When PLTR was $11 I bought a shit ton of shares. I eventually got a letter in the mail handwritten by Karp. He wanted to thank me for being such a prolific believer in the company, and offered to take me out to Aspen to ski with him. The whole ski lift ride he's telling me about WW3, and how Palantir is going to be the only company to come out of the ashes. He went on about data, and it's role in organizing societies once we all revert to using precious metals again. I didn't hit the lift exit right, and he chucked a gold bar at me and called me regarded. Said I'd need it to pay for ski lessons or else the feral dogs would get me in the apocalypse. Like any good bagholder I shook off the warnings signs and just kept on going. I expressed my disbelief about the whole thing, and he got really offended. Said now that Palantir is profitable he didn't need people like me, or my negativity. The stock had just hit $10, and I could tell he was on one. When I tried to bring up SBC, he challenged me to an 80s ski off. Dude did a double back flip off a jump and ended up winning. Last time I saw Karp he was helping my wife on the bunny slope, and I haven't seen her since. That was last week, and I still haven't heard from her. I'll occasionally get emails from Karp about how now that China has balloons Palantir is more needed then ever. He invited me over to Peter Thiel's house for a LOTR marathon, but I'm gonna sit that one out. I haven't taken him up on the ski lessons suggestion. I think I'll just take this gold bar and put the money in an index fund.
I like both names for different reasons, but I think it’s important to check what the numbers are actually meaning. CFLT is a bet on long-term secular growth but SBC dilution risk, while VG is riding regulatory and export tailwinds with a management team that’s proving pretty savvy (if a bit ruthless). I need to dig deeper, but I think I would go with CFLT.
SBC + valuation (P/S, P/E)
Buying assets with overvalued stocks makes sense. SBC still dilutes the value of the company even if overpriced.
i used to think the same way until i read about teradyne and dr. henry singleton. SBC is very flexible, does not incur damage to the balance sheet, and can be recovered. gonna give you the abridged version, highly suggest you read about this fantastic allocator. in the 1960s, teradyne stock was incredibly overvalued. The CEO, Singleton, recognized this as made many acquisitions using stock. The more overvalued his stock was, the more he made acquisitions. Finally, when the market crashed, the stock normalized but the acquistions were already made. They were accretive to the overall company's bottom line, and the balance sheet was impeccable as no cash left the company. In addition, when the market crashed and the company (which became 10x stronger because of the acquisitions), he bought back the company's now undervalued shares. tl;dr stock can be used as an accretive or dilutive weapon so long as you use it appropriately.
SBC is never accretive. It's an expense, full stop, and should be deducted from FCF in doing any valuation work.
Market Cap: 15.2B FCF - SBC: 0.2B P/(FCF - SBC): 77 So a lot of growth is already priced in and in my view, there's no margin of safety. There are so many other stocks out there that are easier buy decisions than this.
\>With a PE of around 130, and a market cap of 15 billion, these 2 numbers alone dont really tell the full story 1) 1B in cash so EV is actually $14B 2) because the stock is so expensive, SBC is accretive as it relieves pressure off the core business' balance sheet rule of 40: 37% FCF margin + 27% YoY growth (forward) = 64 score, very impressive full on growth company. it should not be benchmarked against a sp500 company. looking forward, it trades at around 31x FCF (which excludes SBC as an expense) but as the company grows and matures, we can start looking at PE as a ratio
Let me respond to both of you at once – one confused about insider motivation, the other about tax mechanics. Buckle up: u/noob-smoke" *"So you're saying PLTR execs don’t want their own company to be successful long?"* Not what I said. Of course they *want* the stock to go up... But *wanting* is not equal to *acting like it*. They consistently sell every time they vest shares. They don’t hold. They don’t reinvest. They liquidate. If they were long-term believers, they'd **accumulate**, not **distribute**. The price has more momentum from *retail hopium* than from insider confidence. That’s just the behavior - not the intention - and behavior matters more than slogans. u/nohandsfootball *"RSUs are not 'basically gifted'..."* Yes, they are. The employee **doesn’t pay** for example $185/share when they get RSUs. They are awarded them for **free** – taxed as income *at FMV* upon vesting. That’s it. The cost basis is $185 *for tax purposes*, not because the exec *paid* $185. There’s no checkout cart. PLTR insiders get millions in RSUs every year - then **sell** a chunk to cover taxes and keep the rest in cash. That’s your dilution. Also: withholding some RSUs for tax =/= **paying** for them. This is not a 1:1 swap of value. It’s a reward – not a purchase. This is how RSUs work. It's legal. It’s normal. But with PLTR, it’s **extreme**. Other companies balance SBC with **buybacks** or real earnings. PLTR just keeps printing, insiders keep cashing. You're the long. They’re the exit liquidity. Cheers 🫡
Pepperidge farms remembers when PLTR was known for having an army of consultants and extremely high SBC
SoFi is the only Fintech bank that combines a Charter bank, a Financial technology payment processing platform, and Cyberbank Core capabilities. A great portion of its revenue is from fee services. It has acquired different companies throughout the years to become the most diversified Fintech Bank. It is not here to play the catch-up game, and acquisitions are the most efficient and fastest way to get crucial items on board. It'll take years to build them in-house if it is even possible. The first to dominate all the functions/products will be the winner, and the winner takes most. It is probably the fastest-growing Fintech Bank in the US. The CEO is motivated to reach a $45 (90-day average) target PBC (Performance-Based Compensation) by June 1, 2026, to earn over $289 million in SBC. As Warren Buffett said, "Never invest in a business you cannot understand." I have done DD in SoFi for over four years, and I am very confident I understand this company very well.
SoFi is the only Fintech bank that combines a Charter bank, a Financial technology payment processing platform, and Cyberbank Core capabilities. A great portion of its revenue is from fee services. It has acquired different companies throughout the years to become the most diversified Fintech Bank. It is not here to play the catch-up game, and acquisitions are the most efficient and fastest way to get crucial items on board. It'll take years to build them in-house if it is even possible. The first to dominate all the functions/products will be the winner, and the winner takes most. It is probably the fastest growing Fintech Bank in US. The CEO is motivated to reach a $45 (90-day average) target PBC (Performance-Based Compensation) by June 1, 2026, to earn over $289 million in SBC.
None of that is true though, AI isn't really having any effect on the labor market. You're buying the cover story for what's going on. The labor market troubles are entirely due to the end of ZIRP, covid overhiring and law changes that exempted SBC from counting as a cost on earnings reports. As a result, employers are trying to compress skilled labor costs the same way they always do during this cause of the business cycle. More developers are being hired than ever... just not in the U.S. And random scripts have zero economic value. You're not qualified to judge the actual value of the technology economically unless you've worked as a professional on a real codebase. Even the best agent systems (and I work close enough to these systems that I have access to better models than the general public) aren't useful even for low-difficulty tasks when you're working with production codebases. This tech is less useful than the internet was in the 90's. Commerce was already shifting fundamentally around the internet by the late 90's. Right now, AI is struggling to automate simple customer service tasks with an acceptable error rate. The promise of what ti could be is clear, but the technology currently has essentially no economic value.
I watched the YouTube videos and honestly it’s too tough to get into. I really wanted to like it too. A company with a history of execution issues that is up against a behemoth like AppLovin and unable to recruit compelling sales force between unity or iron source. Not to mention the excessive SBC (for what?) unity has been beaten down for good reason because they’ve squandered every opportunity to build a moat… perhaps interesting at $16/share but it ran up substantially on a new growth driver that is very uncertain right now. I’m not paying 50x NTM earnings for a company like this. Good luck though and enjoyed the DD
Not a bad idea. Snapchat isn't a bad company. Just poorly run. Fire the ceo. Get rid of 50% of the staff. Cut SBC and focus on EPS growth. This stock becomes super profitable and moons. Doesn't need an acquisition. More a change in ownership.
I'm following Gamestop from a distance and what I see is that every time there's a pump, Gamestop dilutes its shareholders. I doubt and also hope Unity is not gonna do that. They already got their high SBC and they wanna get out of the perceived "shitty company" image screwing their clients and shareholders (price dropped from above $200). So far it's looking promising and I don't think they would want to squash this first positive outlook after 1-2 years of negative press.
Chat GPT can do it with some prompts if you want an answer that isnt exact but directional. GOOG does around 1% dilution through SBC each year according to GPT.
Is there a way to check the companies with the biggest SBC relative to their market cap?
I just listened to the TWLO call. The reaction wasn’t that strange, I guess. Numbers look great, but once you factor in SBC they’re tossing on employees the fact that they’re actually in the black on a yearly basis is less impressive. Margin pressure and slowing growth on a quarterly basis, despite increasing accounts. Voice growth is very cool and promising in an “AI is actually being monetized” way.. but an analyst during the q&a kind of was just like “what exactly do you guys do?” Since gpt is actually what’s doing the work. It felt weird to me before I listened to and digested the call.
The Shiller P/E ratio for the S&P 500 is 38.15. The only other times in history it was near this level is 1929 and 1999, both prior to significant market crashes. The P/E ratio is 29. The market isn't reasonably valued right now. Even worse, retail investors will buy stocks like PLTR and TSLA and think they're skilled investors instead of realizing just how utterly absurd their valuations are. Let's do some math. TSLA and PLTR have a combined market cap of 1.47T and a combined FCF - SBC of just 4.3B. That's a P/FCF ratio of 342. In comparison, Altria a market cap of 108B and makes double the FCF (8.7B).
Let's compare CROX and PLTR. Despite making similar amounts of money, PLTR has a market cap over 100 times greater. FCF - SBC: 850M for CROX vs. 969M for PLTR Market Cap: 4.2B for CROX vs, 432B for PLTR.
Shopify has a market cap of 201B (USD), greater than Royal Bank. In the latest quarter, Shopify only earned FCF - SBC of 309M. Obvious bubble is bubble.
SBC seriously the only thing not yet well balanced.
Who is actually buying SNAP these days? Implodes on every earnings, goes nowhere, and is basically an SBC piggy bank for execs
Looks like they have low debt and decent FCF. Wonder why they will do with the extra cash. Could do buybacks to off set SBC. Also invest more.
SNAP is just a cash cow for their employees and founders. They dilute all their shareholders to nothing by issuing SBC. They’ve doubled the float since their IPO by issuing stock to their execs
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I got in with leaps when they cratered because they scrapped guidance last earnings (tariffs). So far I’m up, but I want to see the earnings rip. $SNAP problems are slow user/user growth, R&D into AR/Spectacles, insane SBC. But I still believe they are still undervalued. They monetize their DAU very poorly vs. Meta/Google, this is the real upside and they’ve been progressing faster on it each earnings. Solving this is existential for them.
I also think what Sweeney (someone who owns more than half a million shares of SoFi and is one of the few chosen to give feedback for SoFi Invest—he's an accountant, a lawyer, and has significant business experience) said about the public offering of common stock for possible acquisition makes sense. Additionally, SoFi had $2.12 billion in cash and cash equivalents at the end of Q2. It demonstrates strong revenue growth of 23.62% and maintains a healthy gross profit margin of 82.06%. It seems that the $1.5 billion would likely be used to pursue expansion opportunities or acquisitions. This might slow momentum temporarily unless they announce plans for the use of that $1.5 billion soon. However, it should benefit the stock in the long run. Noto is motivated to reach a $45 (90-day average) target PBC (Performance-Based Compensation) by June 1, 2026, to earn over $289 million in SBC. The $1.5 billion would erase today's stock gains and a bit more, but it’s a price worth paying for what could be a crucial expansion. Just think of it as a sacrifice for the greater good or "bigger pot of gold."
this is unironically not completely wrong. fuelling their operations with expensive stock via SBC, avoiding cash burn + debt burden, aka using your shareholders as an ATM, can be really good for the company if it allows them to get the over the short term hurdle of being unprofitable
That was a yellow flag for me as well. If you look at the amount of shares sold relative to the position held it's marginal. The other yellow flag was they just voted to increase SBC, but that could also be seen as a bullish signal. Overall I'm still bullish but cautiously so
We all know what Atari is, what's your point? And it's up 20% one day and down the next, I'm not convinced. I like their idea of rebuilding the brand through retro gaming systems and little acquisitions, but there's lots of competition from Chinese makers, and SBC stuff like miyoo, anbernic.
One green quarter and y’all think dilution’s off the table? They burn cash like it’s rocket fuel, hand out shares like candy (SBC gang), still need $$$ for satellites, and mgmt gonna milk the stock while it’s still got a pulse. Bags incoming, don’t get comfy.
It's definitely a meme stock. It's up 171% since the April lows two months ago and now has a P/FCF ratio over 100. Market Cap: 82.6B FCF - SBC: 0.74B P / (FCF - SBC): 111