SBC

longGERN

I just don't really get what they do. Buying into security now.. I've got no clue if clients would choose that or a dedicated. And tonnes of SBC Wasn't really cheap imo, lots of growth required Overall a good decision but seeing it skyrocket 30%... It was always meant to just be a small meme position lol

drakilian

Ford pays a good dividend. I know we all invest in texh and capital return doesn't exist in this sector, only capital theft through dilution and SBC, but there are other ways stocks pay you back than stock price going up

SucklemyNuttle

> Amazon has some of the highest SBC out of any company What's your source for this? Based on my calculations, AMZN has SBC Of ~2.7% - significantly lower than many others tech, e.g. PLTR is at 15%(!), Meta at 10%, GOOGL 6%, MSFT at 4.3%...

Legitimate_Cut_6254

Amazon has some of the highest SBC out of any company resulting in nearly every pop being sold by Amazon employee's

Consistent-Brain-361

FY2026 was the last full year reported under the old SBC-excluding non-GAAP methodology. That is exactly why the reported FY2026 $24.27 and guided FY2027 $22.88–$23.12 look like earnings are declining when they really aren't comparable. On the old basis, FY2027 guidance is about: $22.88–$23.12 + $5.81 SBC impact = $28.69–$28.93 So the economically comparable progression remains approximately: $20.15 → $24.27 → $28.81, **or roughly +20% and then +19% EPS growth.**

Fancy_Cattle_5914

So INTU included SBC in their guidance for the first time, which is why they missed guidance. If you remove the SBC, they have a pretty healthy triple beat. Why tf is it down 10%??? Was already down 40% YTD, now 50%. Massive opportunity?

Individual_Limit_701

It depends entirely on what the non-cash expense is If it's depreciation, it's just accounting for past capex. But for companies like Roblox, the massive non-cash expense is usually Stock-Based Compensation (SBC). While SBC doesn't burn liquid cash today, it dilutes existing shareholders. You are essentially paying employees with pieces of your equity instead of 💵

EuroRichTrader

With that SBC programme execs have, they utterly deserve it.

-CoachMcGuirk-

Just a reminder, SBC is a Zionist who fully supports Israel’s genocide of Palestinians in Gaza.

Sea-Rip-9635

SBC is a racist POS. He is playing on and complimenting propaganda being fed through media conglomerates ho have their agendas dictated/influenced by the same folks that influence governments with big money to manufacture consent for starting trouble with these states. There isnt a state on this planet that is free of some sort of f*ckery towards it's citisens and/or citisens of other states. If it wasn't obvious then, it should be now.

SamLeCoyote_Fix_1

Oups... In Q2 alone: ​​$265.2 million from SBC, representing approximately 25% of the quarterly net profit of $1.066 billion.

SamLeCoyote_Fix_1

In Q2 alone: ​​$265.2 million from SBC, representing approximately 25% of the quarterly net profit of $1.066 billion.

jcool9

Where are you getting ‘billions every quarter’ from? Figma’s total SBC for Q2 was \~$148M across the entire company, not billions paid to the CEO. And Dylan Field recently voluntarily forfeited \~2.4M shares of his CEO award with no replacement award. There are legitimate concerns about Figma’s SBC/dilution, but exaggerating it by orders of magnitude doesn’t help the argument. SBC is common for growth tech companies across the board, it’s just a matter of how it’s addressed over time.

jcool9

That’s the GAAP loss, but Figma generated $53M in free cash flow in the same quarter. The difference is largely SBC. The legitimate concern is dilution from SBC, not cash burn. 1.7B on balance sheet

ga643953

Oh yeah, I just checked, that one was from Yipit. But even so, the same third party has been tracking and estimating their run rate. If they're projecting a slow down using the same metrics, then it still doesn't look good. Not to mention, these are just revenue numbers. We haven't even seen how bad the margins and SBC are. I'm not buying this black box company at $2 trillion valuation.

carnitas_mondays

$24B annual stock-based compensation expense not reflected in expenses, off-balance sheet capex commitments, on top of high capex are reasons this might not be a value at current prices. i have been in and out of meta for a decade. i’ll be interested closer to the $350 range. if you adjust expenses to reflect SBC, they aren’t as compelling as MSFT, AMZN, or GOOG.

DontForgetTheDivy

TTD's SBC is wild.

Erocdotusa

Step 1: fire Wong, remove the SBC

cultoftheclave

where is the daily RDDT C-Suite SBC share dump? oh right, that's only on days with good news

Ryu6912

Don't worry Jen Wong and the other insiders will take advantage of this pump to dump more of their SBC. It's okay it's 'healthy!' /s

Remarkable_Cat_8696

Yea, SBC makes up a large portion of its ocf. It seems like they dilute shareholders ,don't offset it with buybacks and pay no dividends...

Ephemeral_limerance

The company doesn’t offset the value of stock comp buy buying back shares, so the dilution impacts every nonemployee. Just look at how much SBC they have every year and they historically don’t do much buybacks

Maakus

That's the hope but at this rate its a 100% gain between 5-6 years with a consistent buy back schedule of around $5B a year. SBC adj free cash flow is slightly going up but my purchase price is higher than it's current price so I'm not very proud of the holding.

QuatroCisco

„Adjusted EBITDA margin“. Or in Mungers words, bullshit earnings. So we‘re not gonna count the depreciation of GPUs which we took on debt /diluted shareholders for and SBC and say we‘re profitable. Sure thing 🫡

Nearby-Ad9422

Slowly but surely Palantir will fall to $150 in the next few days. Extremely, overvalued stock. I will keep selling at this $175 range all day. Just like the memory stocks. The hype needs to be over. SBC authorization is eating up shareholder equity and their declining international business is a major red flag. Forward PE of 110?? lol

OkInitiative3686

No per GAAP accounting, RSUs are expensed over the vesting period and show up throughout the equity statement. They are heavily accounted for and explicitly called out in any issued financial statements by companies who have material amounts of SBC

A55BAG

People are so surprised Intel making a equity issuance, but I always expected it. It's not like they make any money 🤣 SBC have been way more brutal dilution wise on Intel than this issuance as they can't afford to buy back their overvalued stock anymore.

Nearby-Ad9422

Good for you too. This is the beauty of capital markets. You can make money in bull, bear or sideway markets. I sold mine at $151. I didn’t like the fact he was issuing massive SBCs and simply excluding the global business decline from the earnings call. That was such a rat move. If you include the SBC that is 15% of the business revenue cost. Pulling an accounting make up like that is a rug pull if you factor that cost in the net income. He needs to stop that SBC or reduce it.

Nearby-Ad9422

Thanks. I like Karp, and I think Karp is a genius, but masking the earnings with SBC is a rug-pull move.

Nearby-Ad9422

Palantir is hiding it's problems and mentioning it's good side only. The SBC qill dilute the earnings of the share holders. All of you waiting will cry soon when this big SBC make up comes off. :rob:

Nearby-Ad9422

Short Palantir stock to $150. Fed up with Alex Karp's SBC diluting EPS.

MitchCurry

Really liking what I'm seeing in TBBB. Discount Mexican grocer who is growing rapidly. They're using the Aldi/Lidl method. Stores are small (300-400 sq meters) with limited choices (\~1,000 SKUs only compared to \~10,000 for a conventional supermarket). Mostly private label products and they are expanding their own private label brands. At the end of 2025, they reported developing over 113 private label brands representing over 525 SKUs, of which these accounted for 58.2% of total sales, which is up from 53.6% in 2024 and <50% all years prior. Since the stores are small, they can be placed close to lower and middle income families rather than the more expensive, high foot and car traffic locations of larger supermarkets. They had 3,346 stores at EOY'25 and believe there's room for an additional 10,000 locations in Mexico, the only country they currently operate in. They also now own and operate 20 distribution centers. There are no wholesalers, no franchisees, and no e-commerce. Direct company-to-consumer distribution model. Total transactions have gone from \~278MM in 2019 to over 825MM in 2025. In the same time, average ticket has nearly doubled from MX$50.30 to MX$94.90. Same store sales have ranged between 12.3% and 22% since 2019, with 2025 being 18.3%. Revenue has grown >28% every year that is publicly available (IPOed in 2024 but F-1 goes as far back as 2020 for income statement). FY25 was 36% topline growth. Gross profit margins of 16% and holding steady. Net income is skewed and will be through 2028/29 as IPO-related SBC charges roll off. It's a company in the early stages of a build out that could disrupt the Mexican grocery industry. I'm not the only one who likes it. TBBB has been trading at or near ATHs since June. It's up 22% YTD, 60% on the 1Y, and more than doubled since IPOing. I need to do more research but it's going near the top of my Buy? watchlist.

jessewalker2

Wendy’s already offers SBC (single bacon cheeseburger). You just gotta place an order for it.

TechTuna1200

You’ll stop laughing when Wendy’s pivots to AI data centers and they are offering SBC with no vesting schedule.

MitchCurry

Do you mean 19% of their revenue, a decrease from 22% in H1'25? If SBC was the reason not to buy, I wouldn't have bought at $114 in March 2022 and added 5x since from $110 down to $69 when their SBC % of revenue was in the 25% range. There's more to a company than SBC.

msaleem

How about $400+ million in SBC in H1?

bzl33

i've been bearish figma since the ipo but they keep getting battered despite ok earnings. SBC and not enough AI must be the drivers.

SamLeCoyote_Fix_1

The $1.86B GAAP loss must be ignored due to the $1.65B warrant MTM charge. However, the Adjusted EBITDA loss of -$120.3M still excludes $141.8M in SBC. If SBC is treated as a real economic expense, the true operational deficit is catastrophic.

Remarkable_Cat_8696

Is it to offset previous share dilution, considering its SBC and spun off in 2025? and their capex was low at 40 million this quarter, they have plenty of fcf to buy back its shares.

RuleSafe6767

I'm not going to have staff selling their SBC into weakness. Plus, we're locked up for another month, right? Can you image how low it might be by then? Not on my watch. Call up the marketing firms; we need all the bases covered. I don't care if we need to double up their contracts. Get it f'in done.

BabyNoonz

Increasing SBC is painting a very ominous future

FreedK70980

So the SBC basically just washed out the buybacks in terms of actual share count? That's wild. I wonder if megcaps have it worse since they're buying back at such high prices anyway.

RogueJello

I guess I wonder what you think they're going to acquire here. Right now they appear to think that GTBIF is the best thing to invest in, which is why their buy backs at $6.11 is where a lot of FCF is going, and it exceeds their SBC package requirements, which is the level they were spending at when it was closer to $12-15. They've definitely got the capacity to do some M&A, but they might have better opportunities if they wait.

RogueJello

I guess I wonder what you think they're going to acquire here. Right now they appear to think that GTBIF is the best thing to invest in, which is why their buy backs at $6.11 is where a lot of FCF is going, and it exceeds their SBC package requirements, which is the level they were spending at when it was closer to $12-15. They've definitely got the capacity to do some M&A, but they might have better opportunities if they wait.

BeuTaude588

the screen bundles two different problems: SBC dilution and buybacks at peak valuations. one's structural to tech comp, the other's execution failure; the 10-K won't show which.

JohnnyDrama611

Noted. This analysis is using dollar values for both SBC and share buybacks. I use dollar values because if a company does buy back stock at peak multiples, then they will spend more money for less shares, which reflects in amount spent / share count.

hseeman_sf

The screen conflates two different failures though. A company that never buys back and just dilutes via SBC is one problem. A company that buys back consistently but overpays for its own stock at peak multiples is a different one, and it can still show flat or falling share count while destroying value per share. Price paid matters as much as the buyback happening at all.

greenpride32

My comment more or less covers your point. I worked in big tech. SBC and RSU are offered to both attract and retain talent. That is what keeps the innovation wheel spinning.

catpicsforfree

It’s a bit concerning that their buybacks aren’t even offsetting their SBC

Open_Pollution_8038

But SBC would be down because the stock price is like 30% of its 2025 price?

myotheraccount2018

Just be wary of SBC.

SpongEWorTHiebOb

Down 8% now. It’s a very expensive stock after its run. I believe the EPS for the past 2 quarters after giving effect to SBC is .46 plus .31 for the next quarter and .4 for final quarter you arrive at 1.07 in normalized EPS. Implied PE of 87. This accounts for SBC as an actual expense. Historically expensive for Intel. Also their gross margin is still stuck in the low 40%. That’s pretty lousy for a big cap semi and well below what the company showed when it was dominant. To sum up at $93 you would be investing in a company at a premium multiple with below industry gross margin. Still a pass for me.

notreallydeep

ex SBC maybe they're running inference at a like 70 or 80% GM, though.

MarthaJulietta

Lol bro 1B in SBC this year MC 7B. You gotta outrun some serious dilution on top of negative margins. Ain’t no way this is a good buy.

TrainingLower2317

SBC competition is ridiculous!

Ridge_Capital

FCF 32.8 and SBC 8.8, official P/FCF 55, higher considering SBC

Ridge_Capital

Official P/FCF of 44, higher considering SBC

Ridge_Capital

FCF 4600 and SBC 2000, with official of P/FCF 23, real P/FCF is above 40.

Ridge_Capital

Shares Outstanding (Diluted): 2021: 116.1M 2022: 117.3M 2023: 118.1M 2024: 116.7M 2025: 117.1M TTM: 115.7M Repurchase of Common Stock (TTM)= 483.6 M Stock-Based Compensation (SBC)= 82.7 M But the shares are not reducing accordingly. Maybe SBC is not calculated according to current prices? $483.6M/$147.5=3.27M shares, but they only reduced by 117.1-115.7= 1.4M (3.27-1.4)M\*$147.5= $275.8M just to not dilute. FCF Yield= (1367.9-50.7-275.8-62.9-121)x100/17050= 5.03% Is this correct or its very conservative?

Extension_Diet4064

Subtracting SBC and the buyback cash spent to offset it is double counting. You either treat SBC as a cash expense or subtract the buyback cash used to keep share count flat. Since Seeking Alpha's CFO adds back SBC, you just subtract either to get the clean yield. How does their net share count trend look over the last 3 years?

Ridge_Capital

Thanks a lot for your suggestion. You are right, to be even more conservative we can do it that way. Another redditor told me also to look closely at how they capitalize software development because financial software firms often shift development costs to capitalized assets to keep operating expenses artificially low. Taking all into account we have: Cash from Operations= 1,367.9 M Capital Expenditure= -50.7 M Stock-Based Compensation (SBC)= -82.7 M Sale/Purchase of Intangible Assets (Capitalized Software)= -62.9 M Cash Acquisitions (M&A)= -121.0 M Market Cap: 17,050 M My first FCF yield calculation was: (1367.9-50.7-82.7)x100/17050= 7.2% Taking the more conservative approach: (1367.9-50.7-82.7-62.9-121)x100/17050= 6.2% I used TTM values from Seeking Alpha. What I don't get is what is the point with the buybacks, I already considered the SBC, so, if we count buybacks we are considering it twice, aren't we?

Extension_Diet4064

If you look at the 8% growth, you've got to account for how much is acquisitions. They don't just grow organically, they do a lot of bolt-on deals to keep the software side moving. SBC might be 6% of FCF, but share dilution is around 1% because they offset it with buybacks. That cash comes out of the FCF that'd otherwise go to you. How are you adjusting your FCF yield for the cash spent offsetting that dilution?

fadeawaythegay

Had a Netflix offer, they use SBC the least compared to most tech companies.

MarthaJulietta

Thats not bad if its just Q2. Whats SBC?

awesomeslaws

Sure. Or they just sell stock for cash and pay those employees. Either way, the result is the same: no impact to cash flow, but shares outstanding goes up diluting existing shareholders. So FCF per share is an appropriate metric that already includes the impact of SBC in the denominator. If this goes up, it means that even after SBC dilution, FCF is growing

SoSeaOhPath

Can’t seem to post pictures in the comments, but the TTM FCF per share minus SBC is the same shape… albeit some smaller numbers. But shares outstanding are moving down and total SBC is not growing as fast as FCF. More linear growth than this exponential.

awesomeslaws

Well, SBC is strictly a non cash expense, it does not impact cash flow. It impacts dilution and shares outstanding. Accountants take those shares and convert it into a dollar figure to expense it on the P&L, but it’s still non cash. So, no, you would not burden FCF with $SBC expense if you already include the SBC shares in the denominator.

OrdinaryReasonable63

Depends on where you are pulling your FCF, if you are pulling it from their own statements you have to expense the SBC, it is not enough that it is on a per share basis, the numerator changes much more than the denominator. This $4.5 is probably adjusted, the real figure is probably 50% lower given their high SBC.

awesomeslaws

If the metric is on a per share basis, it’s already diluted by SBC, because SBC just increases shares outstanding

kenzi28

Click on SBC adjusted fcf and show us..

Ok_Chip_1868

I don't invest in companies that have any dilution other than SBC. This is good insight.

-Authorised-

Fair points, and I'll take them head-on rather than dodge. SBC: yes, 2025 SBC was \~$51M. But two things. It's falling fast - it was \~$74M in 2024, so they cut it by a third in a year. And even if you fully expense every dollar of it against FCF, you still get \~$53M of clean FCF. Against a \~$140M enterprise value that's under 3x. The thesis holds even on your stricter measure. Dilution: the buyback authorization (\~$59.5M remaining) is ongoing and the trailing 12-month share count is now down, not up. The SBC is being mopped up, not left to run wild. The Q1 declines: active buyers down 18% and marketplace revenue down 14% are the low-value $5-gig transactional junk rolling off by design. That IS the thesis. Over the same period services revenue grew 30% and spend per buyer rose 15%. They're trading a pile of tiny gigs for fewer high-value projects. Revenue optics look worse, unit economics look better. Is it sustainable? They guide FY2026 adjusted EBITDA of $60-80M in a year they are openly calling a heavy investment/reset year. A business throwing off that kind of cash while re-architecting itself, with net cash worth most of the market cap, is not priced for "maybe the FCF holds." It's priced for terminal decline. Those are very different things, and that gap is the trade.

New_Sympathy5203

Cheap? Maybe. But the post ignores the main risk. 2025 FCF was 103M, but SBC was 51M, and shares still increased despite buybacks. In Q1 2026, active buyers fell 18%, marketplace revenue fell 14% and FCF fell 23%. So the question isn’t whether Fiverr looks cheap on last year's FCF. It’s whether that FCF is sustainable.

Routine-District-588

I think all of them are crazy strong. i own microsoft too. if amazon wasn't dilluting shareholders with SBC it would also be a buy for me..

Sanpaku

OP doesn't understand who sell-side analysts are working for. Traders that set stops can do well buying dips. Longer term investors are better served by waiting until valuation, confidence in management and price action are in alignment. MSFT presently trades at a 2.56% FCF yield (ttm), closer to 1.78% once share repurchases to counter SBC dilution is accounted for. Little confidence in management, given the malinvestment in gen AI and Copilot debacle. Since early November, its only been above its 50d SMA mid-April to early June. Or just DCAing into broad market indices.

-Authorised-

On dilution / “no money, no raises” The BRPC II agreement is a pre‑agreed equity line set up in mid‑2025 to fund fleet growth and working capital, not a panic cash raise. As of Q1 2026 they’d issued only 260,628 shares under that facility out of 11,080,332 approved – that’s roughly 0.4% of the share count actually drawn, with the rest just registered in case they want optional growth capital later. Calling that “no dilution ever” is sloppy wording; calling it “meaningful dilution” is also a stretch. The diluted share count moving from \~58M to \~64M is also not “they printed 6M shares into the market”. Diluted EPS uses a bigger denominator because it assumes options/warrants get exercised. That’s accounting, not necessarily 10.3% more stock already out there. On buybacks: in theory, yes, buybacks could offset SBC. In practice, a small asset‑light platform in a multi‑year tanker upcycle is usually better off using surplus capital to expand its fee base (more ships, more voyages) than to shrink the float at this early stage. You can disagree with the capital allocation, but “they must need money” is not the only explanation. On CEO / insider buying The “he’s only buying to avoid delisting” theory doesn’t line up with the timeline. He was already buying before the Nasdaq notice arrived, he owns roughly 45% through direct and indirect holdings, and he kept adding even after the stock moved back over the $1 threshold. If this were just about job security optics, you would expect the buying to stop once compliance was restored. You’re absolutely right that insiders can dump later; nobody is saying they are physically incapable of selling. The point is that right now you have: • a CEO who already controls the company, • adding on top of that at market prices, • while repeatedly saying on video he intends to hold. Tight insider ownership + tiny float does create real information asymmetry and volatility risk. That’s a valid risk flag. But using the same insider buying both as “proof” of manipulation and as something to ignore because “he might sell one day” is internally inconsistent. On profitability and the cash pile You’re correct that Q1 2026 benefited from very strong tanker rates and high vessel utilisation. It’s fair to say the business is cycle‑exposed. The numbers still matter though: • Revenue up \~200%+ YoY • Net income from roughly –6M to +2.8M in a year • EPS from \~0.01 estimate to \~0.06 reported • Cash at 27.6M, zero financial debt On the “cash pile nearly majority of mcap”: you’re right that the precise number was \~39% at the time (27.6M cash vs \~70.8M market cap). “Nearly majority” is marketing language; “around 40% of market cap in cash” is the clean way to say it. I’m happy to stick with that wording going forward. Where your comment leaves an important piece out is how management itself frames the drivers: • The CEO has said on record that the closure of the Strait of Hormuz was “shocking” and essentially a bonus, not the base case. • On the same set of appearances he said Q1 would be profitable and Q2 would be bigger than Q1’s \~2.8M net income, and then Q1 delivered exactly what he’d guided. So yes, Q1 rode a strong cycle – but management is explicitly saying the underlying tanker market has legs and that the Hormuz situation is an extra tailwind on top, not the only reason they made money. You can still decide you don’t buy that guidance, but it’s not accurate to act as if the company is pretending Q1 was achieved in “normal” conditions or that they’re ignoring cycle risk. On “they clearly need money” The fairest criticism in your post is: “they haven’t yet proven they can stay profitable if the cycle normalises.” That’s true and exactly why Q2/Q3 will matter. What isn’t supported is the idea that: • a 0.4% draw on an equity line, • in a company with \~27.6M cash and no debt, is proof that they’re desperate for cash right now. It’s simply not a binary “either they never issue a share or they’re broke” situation. If you want to attack the thesis, the real angles are: • How long the current tanker upcycle lasts. • Whether management actually executes on the growth plan. • Whether they keep capital allocation disciplined as cash builds. Those are serious questions. “They issued 0.4% of shares and therefore need money” and “CEO buying automatically equals pump‑and‑dump” are weaker ones.

FreudMayweatherIII

Oh hey, it's you again. I still have the same questions from your last post a week ago. RE: "No money, or dilution or raises" If they don't need money, then why continue issuing stock? Their diluted shares literally increased by 10.3% over the last quarter from 58 M to 64 M, and the common shares also increased. Last quarter's earnings reported 260 628 shares issued out of a total approved 11 080 332 shares @ $1.27 (which implies they think $1.27 is an attractive price to sell at). Why would they issue new shares to raise cash if they already have a cash pile and apparently don't need money? Why couldn't they use that cash pile and buy back shares instead to balance out the SBC dilution while also increasing the share price at the same time? They are doing the opposite. By continuing to issue stock at these valuations implies: 1) HMR needs money and/or 2) the executive board is misallocating capital. Which one is it? RE: CEO/Insider buying If I were CEO, and my job's existence depends on maintaining its stock price >$1, I too would also be buying shares above market price so my company doesn't get delisted and I lose my job. Not only does this boost the stock price, it is also good optics. Unfortunately, just because the CEO says he doesn't plan on selling, doesn't mean he will hold forever, and a large accumulation of shares by insiders eventually becomes a liability, and a set up for a pump and dump or price manipulation. Think about it: 90% of the supply of HMR shares are held by those with insider information and direct control over the company's operations, <1% institutional, and the rest are retail. In other words, the board needs retail money to come in so they can exit because the institutions aren't biting (I wonder why). This is some insane information asymmetry. Some people already distrust financial institutional ownership and allege that they can manipulate stock prices, now imagine what they could do if they also had insider information and executive control. RE: "Now profitable with a cash pile nearly at majority of mcap" HMR required high charter rates and shipping volumes that you typically only see during the peaks of the shipping cycle to generate a small profit, and hasn't proven profitability outside of these tailwinds. I would not call this "totally clean". Also, cash was $27.6 M, market cap is $70.8 M. 27.6/70.8 = 38.8% which is technically "nearly at majority" but I guess saying \~40% is less convincing. Yes, that is still a large amount and could suggest that HMR is being overpunished and could probably be a swing trade in the short term, but has near zero impact regarding the company's profitability long term. RE: "Your ai is wrong (about needing money)" This is the truest statement. Remember, "ChatGPT can make mistakes. Check important info." Are you sure they don't need money? Because when I check the important info, it seems like they do.

mycroftitswd

Natural sellers gone, natural buyers arrived/anticipated Huge post IPO selling is mostly over: Pre IPO investors have mostly exited except Advance Publications (long term owner) and Spez (CEO) , large pre-lpo stock grants mostly finished vesting. Short interest staring to decrease since end Feb. . Float stabilised at approx 75%. SBC will normalise by year end. Profitable. Therefore S&P500 inclusion is starting to look realistic. When models predict high enough likelihood, 20-30M shares will be bought by front-runners and benchmarking funds long before inclusion is announced, and short sellers get out of the way. Share buybacks happened at $146ish. A director bought in March at $150 and below. With sell side consensus estimates, DCF models and price metrics put fair value above $160. Licensing deals with Google and Openai must be renegotiated by Q1 2027. Upside catalyst. Because of above, significant dips are being bought and rallies aren't being used by early investors to cash out.

ohgodthehorror95

Yes but not all software, which is why I'm invested in specific companies rather than a software ETF. I'm very bullish on cybersecurity. Buying the dip on PANW under $150 was a no brainer for instance. However some of these companies kinda suck. WIX is a zero because their business (building a website) will 100% be disrupted by AI. TEAM is trash because of the crazy amount of SBC. I'm far more optimistic on enterprise software companies as well as ones that operate in niche areas less likely to be disrupted.

DeRham92

I think the accounting standard for SBC are a bit misleading. If you look at SBC for applovin you see very small number, so the FCF net SBC is very high. However if you look at the trend in total shares outstanding you see that the number is not decreasing after 2023. This is due to the "Stock issued in connection with equity awards" reported in "Condensed Consolidated Statements of Stockholders’ Equity": in 2024 and 2025 the total amount of shares buyback just cancel out the stock issued for equity awards. This means that there was no capital returned to shareholders and since 2023 the entire free cash flow was used to avoid diluition. I think that this divergence between the accounting value of SBC and the cost of shares buyback is due to the big appreciation registered by the stock: new stocks issued in 24 and 25 were accounted in SBC years before, due to the vesting period when the price was low. Then at the end of vesting period they were recognized as outstanding stocks and the company did buybacks to keep this number constant. So maybe this will not be a problem for the future because if it is still the case that SBC and actual stock issued diverge that means the price of the stock is up a lot. Otherwise if the stock price does not grow the buybacks should reduce the outstanding stocks. What do you think? Does it make sense?

hseeman_sf

There are are number of things you need to look at in 10K, not just in isolation but reading 2-3 years of 10Ks sequentially, very hard to do it without tools. That said, LLMs are great at precisely this kind of work. You could ask the LLM to do the following (this is not an exhaustive list by any means, add/delete as you see fit for your own process): * **Gross Margin Trajectory:** Extract 3-year gross margins; flag any compression relative to revenue growth. * **Operating Leverage:** Identify fixed vs. variable costs and evidence of declining customer acquisition costs. * **Capital Efficiency:** Calculate Return on Invested Capital (ROIC) and track CapEx as a percentage of revenue growth. * **Shareholder Dilution:** Calculate YoY share count growth and Stock-Based Compensation (SBC) as a percentage of operating cash flow. * **Customer Concentration:** Flag any single client accounting for >10% of total revenue. * **Accounting Red Flags:** Identify changes in revenue recognition (Notes 1/2) or shifts toward capitalizing rather than expensing development costs. * **Unique Vulnerabilities:** Extract non-boilerplate risks (e.g., single-supplier reliance, third-party platform dependency). * **Narrative Drift:** Compare the MD&A to the prior year and list any strategic initiatives that quietly disappeared.

GloveBrilliant1190

First of all, I think WEN is fundamentally different than GME/AMC. I posted DD you can find on the sub a couple days ago but they're not at all comparable. But a healthy stock price helps a business in a couple ways. One, you can attract better talent since stock based comp will be more attractive. You also don't need to mint as many new shares when you provide SBC to employees. And the second way is by selling equity at the market if the share price rises significantly. If WEN were to go to say, $30/share, management could create new shares out of thin air, sell them on the open market, and then use that cash to pay down debt. That instantly creates more free cash flow by lowering your net interest expense

Routine-District-588

I just hate SBC model of the SAAS companies. they were extremly expensive, now they less expensive but not cheap or anything like that. there are some unicorns that are extremly cheap like adobe but shady things going there with ceo leaving and cfo too. Just for example NOW the darling of saas is like 50 P/E. Like wtf bruh? i'd rather just buy microsofot for saas play.

-axelrod

Thanks for the update! I've been following your posts on GRPN recently and taken a small position so far after Thursday's action. I'm from the UK so the SumUp aspect has always been the key aspect to me, however the moves to leverage AI will hopefully decrease their Opex as well as their share buyback program. I wasn't sure if they were cancelling shares as part of the buyback, or just using it to fund SBC.

dreggers

You really think companies can just dilute their shareholders, stop buybacks, and issue debt for free? The man reason they were valued so high previously was due to their immaculate balance sheets. The other issue is SBC which continues to be very high and hidden from the income statement

half-coldhalf-hot

SBC? Son of Baconators?

afishinacar

I know an ex Wendy's exec. As far as I know he held onto all his SBC over the years. I hope you guys can pump it up enough so I can tell him to offload his bags onto you guys.

teddykon

The stock is a bit interesting because if Evan ever sees the light and decides to completely abandon hardware and focus solely on his social media app, the stock could literally triple But I’d rather not invest in hoping a CEO with 100% voting control sees the light. He already treats the company like a massive piggy bank ($1-$1.3B in annual SBC) and he regularly sells stock. The man has enough money to sail off into the sunset and has no incentive to change his ways

ThinkingOfTheOldDays

Pricing power, no more cash free SBC to attract engineers, and they'll have to expend in AI investments  Shrinking sales, higher expense, really high starting multiples 

Smooth-Gene17

SBC was stripped down in early 2025. Nowhere near 60% now

ThinkingOfTheOldDays

Saas decline is from expectations about declining seat revenue, difficulty of migrating to usage based pricing, pricing power issues in general, AND increased expenses for AI investment, AND declining ability to monetize share price w/ SBC. AND hit to terminal value as most of the software tools aren't durable enough to last 5 to 10 years. 

ByClaviqo

That makes sense, buybacks offsetting SBC. This is actually the cleaner way to manage it. Curious what rate you're modelling for the buybacks going forward given the current valuation.

OilAny787

Current buy backs in my projection are offsetting the dilution from SBC so a slight reduction over the period. As said in the post, if you want the details drop us a message!

ByClaviqo

There is one more thing worth adding, SBC. Their layoff isn´t just about the headcount costs. Fewer employees also mean fewer future equity grants, which matter ´cause dilution has been a quiet drag on HOOD shareholders for a while. That said: shares already vesting don´t vanish, so short term impact is minimal. At 47x PE there´s no room for dilution to outrun growth. What´s your share count trend looking like?

Scary-Oven8260

Palatir was one of the few GAAP profitable companies 3 years ago. Meanwhile companies like snow are still not GAAP profitable today. All profit going to SBC

ohgodthehorror95

Most of the ones he listed have at least half-decent financials. Except for TEAM. They've been in operation for like 25 years and they're still not GAAP profitable and issue a shitton of SBC

SuperSultan

If they laid off 20% of their workforce, the company would collapse. You’re acting like it’s not poorly managed enough already. And people care about net earnings and FCF not EBITDA. Since this is a tech company I’d even ignore FCF too. The real number is what you get when you subtract SBC from FCF.

Acceptable-Friend-92

The app is one of the highest quality consumer app. Ask any college kid. There's a reason why they have 50% DAU/MAU ratio. But the company management is definitely garbage for focusing on SBC vs growing the valuation!

Acceptable-Friend-92

What's your logic? $8B valuation for a company with 6.5B revenue, growing at 15%, 1B users, EBIDTA positive and a couple hundred million in free cashflow. SBC is an issue, but that's not unique to Snap among its peers.

Acceptable-Friend-92

Yeah. SBC is definitely a problem. But it's something they can fix. They have a new CFO, hopefully he's more sane!