Another sell everything a la AYX?
If one expected another >60% growth for Q3 then one would be disappointed.
The pre-announcement puts Q3 growth in the low forties. If one followed management estimate for Q3 back in August, expectations should have been for growth in the ~mid to high 40s. But based on the run up of the stock, many expected much more and something more like the 62% they had in Q2. But what were the reasons for this expectation when they did say that this type of growth was a one-time deal? Shouldn’t one ask these questions when the stock is running up as well as after it drops down? either way the stock overshoots every time that happens. There is no good reasons or known facts that would warrant a liquidation.
tj
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Yeah, we see a lot of emotional posts on Fastly these days. I personally decided - at least for now - to keep it. Main reason - I want to see more details on BUSINESS PERFORMANCE. This means - new clients, DBNER, margins/op leverage, EXPLANATION on revised guidance AND guidance for Q4/full year/next year. So, basically I will wait for the earnings release and conf.call.
Yes, it looks disappointing - the way the management handled it. Main lesson at least for me here is usage based business model implications - it could work both ways - on the upside and the downside.
Now, for those who sold there are 2 options - keep cash and try to time the market or re-deploy to other names. People often bring Net as alternative. But let`s stick to the FACTS. Net‘s growth is in high 40% and Fsly on average will be producing this year around the same growth rate. Net DBNER considerably lower than Fsly‘s (117 vs 138). It‘s valuation is almost double of Fsly’s - about 18b vs 9b and annual revenues of about 400m vs Fsly‘s 300m. Both are LEADERS in their niches. Both are trying to expand. Both are innovating. I own both names. Not planning to add to Net at this point as I want to see FACTS on their performance from earnings release.
For the same reason I want to see MORE FACTS about Fsly business from earnings release and call. I could be totally wrong here if recent announcement was an early bird of REAL BUSINESS DETERIORATION of Fsly and fully understand people who sold out these days. But earnings release is pretty soon - will wait and re-assess once more facts are on the table.
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Hi LearningInvest0r,
I agree with you mostly, but I think people on the board exiting their positions in FSLY are not just emotionally reacting to the guidance change (for my ethos, I still have 10% of my portfolio invested in FSLY even after today’s trimming).
As you said, there are a lot of facts that are not given to us. All we have is a few pieces of information indicating the slow down in the revenue growth contributed by not only Tik Tok but also some other customers. We do not know whether the decrease in use by these customers will be permanent or not and thus there’s chance that annual guidance will be changed at the end of this month. Whether the management predicts the company to be at least a 40% grower or return to a 30% grower we do not know. The latter will surely have a bad ramification, but without having the facts, we are just blindly betting 50/50.
Although I am new to investing, I have been repeated told that a successful investor is not the one who makes a lot of money, but the one who can defend his money. Although you make hundred good investments, one bad investment can cost your fortune. Perhaps, by de-risking themselves from this uncertainty, the board members who sold off FSLY are being prudent.
As to putting money into NET. My take is that FSLY’s deceleration in growth might indicate NET’s gain. I remember reading NET’s report saying that the customers who were dissatisfied by FSLY’s use based pricing model migrated to NET. Maybe this was a factor?
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For me, exiting FSLY was about management issue. Revised guidance being a symptom. Heres why -
Initial Q3 guide itself was low and a surprise. Stock lost 35% then. They have revised lower now without giving any details. They have rescinded guidance for the year.
Along with this, you had Bergman’ s stock sale on Monday. And then the 6M shares for SS acquisition yesterday.
I just found this filed today on Edgar-
https://www.sec.gov/Archives/edgar/data/1517413/000124323320…
Offering of 556M dated October 1.
Looks like the new filing today is for SS acquisition as well…