There was an interesting post on the tech sector posted on SA recently that it worth a read. The author has a bearish bias, but there is still a lot of good food for thought on there.

He also said some things in the comment section which got me wondering about the risks for MDB (which I own). He essentially said that Cloudera/hortonworks was growing extremely fast until without warning, it hit a wall and then the stock rerated downward violently. Could the same happen to MDB? How can MDB avoid that type of fate?

“Mdb is a whole other interesting debate because there is a whole technology element around it that remains ultra controversial. There is no denying that Atlas is working great getting developers who are prototyping onboard. The bigger question here is where is the future of the model and whether the nosql movement has really got much legs in it at this point. Make no mistake its a very heated topic at this point which really begs the question exactly how big is this market mdb has been thriving in, and how sustainable is it. As well as tons of questions around a lot of their strategy here which i will maybe deal with one day in more detail. But consider Cloudera/hadoop knocked out three nice years on way to what will now be close to 800ml in rev biz, and they ran into a wall and this is now a 1x ev/sales stock. This stuff is so binary here its ridiculous. So, mdb at 2bl and 10bl literally could be same exact convo. You don’t even need to be having the hadoop dying convo around this doc db and still can get to 50% downside without even blinking an eye and them proving succesfull well beyond what their tech stack implies.”


FWIW I don’t think this is a good comparison. The problems that CLDR hit were largely self-inflicted, based on poor decision-making, bad timing and a host of other things. I can’t elaborate since I have a family member that works there still (yeah, he’s pretty unhappy), but so far I have not seen that kind of bad decision-making at MDB. Could it happen? Sure, anything’s possible. I just think without actual data points or similarities, this is a pretty wild what-if scenario.

The more interesting question is whether CLDR can make a turnaround, in which case it would be invest-able now for a lot less, and how that might play out. But the risk is clearly non-zero.