TEK2day Podcast

WeWork pulled its IPO this morning. Here's what comes next.

Stripe and DataRobot capital raises.

Amazon places EV order with Rivian.

1.) SS&C Deliver: https://www.ssctech.com/deliver

2.) WE S-1 Filing: https://www.sec.gov/Archives/edgar/data/1533523/000119312519220499/d781982ds1.htm

3.) SEC charges GE with Accounting Fraud (2009): https://www.sec.gov/news/press/2009/2009-178.htm

1.) WeWork holders exiting completely on the IPO;

2.) Activist Investor targets: AT&T, IBM, ROP;

3.) M&A Strategy;

4.) Private Equity's scam;

5.) Paycom's (tkr: PAYC) aggressive accounting.

I. Our TEK2day article on Stripe Capital: https://tek2day.com/2019/09/09/stripe-capital-the-latest-fintech-disruptor/

II. Our TEK2day article on 3 activist investor targets: AT&T, IBM, Roper Technologies: https://tek2day.com/2019/08/13/three-activist-investor-targets/

Amazon's scale enables it to innovate in a controlled, scientific manner which provides a competitive edge over smaller competitors.

Related TEK2day articles: https://tek2day.com/2019/09/04/dont-bite-the-hand-that-feeds-you/

In this episode we cover Harry Markopolos's GE report, more on the Capital One cyberbreach and three companies that we believe activist investors have their eyes on: AT&T, IBM and Roper Technologies. See links below:

1.) GE Report: https://www.gefraud.com/

2.) Capital One - Our Recommendation for standing up a CyberSecurity operation: https://tek2day.com/2019/08/05/cybersecurity-is-not-someone-elses-problem/

3.) AT&T, IBM & Roper: https://tek2day.com/2019/08/13/three-activist-investor-targets/

We are not fans of AVGO's M&A strategy. Here in episode 302 we follow-up on episode 301 and explain why it will essentially be impossible for AVGO to grow SYMC's Enterprise business so long as it runs EBITDA margins hot at around 50%.

Run rate revenue on March 2019 quarter Enterprise Revenue of $584 million implies $2.336 Billion run rate revenue for SYMC's Enterprise Business.

-A 35% Op Margin applied to $2.3B revenue implies a 12x multiple at the $10B valuation reported by the WSJ.

-A 40% Op Margin implies 11x.

-A 45% Op Margin implies 10x.

-A 50% Op Margin implies 9x.

-These implied multiples are what one would expect for a slow-growth to flat topline business.

-The Enterprise Business is a flat-ish topline business (run rate revenue flat with FY19 reported revenue of $2.3B). Should AVGO wish to grow this business expanding Op Margin beyond 35% would make growing the topline difficult.

Companies remain slow to act and investors are increasingly desensitized to cybersecurity breaches. None of this is positive.

Related TEK2day article: https://tek2day.com/2019/08/05/cybersecurity-is-not-someone-elses-problem/