Just a quick update here, at work now so I can’t do anything in depth. HUBS is Andrew Left’s next short target. Just posted on Twitter about it, appearing on tv this afternoon.
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That pantload is a marketer whose only gift is attracting attention. He is not an investor. Easiest game plan on Earth - find stocks growing quickly, smash them with every single thing you’ve got, profit off the meaningless price drop. I hope he hits the stock price hard. I will
gladly add more. Inbound Marketing, done well, is brilliant.
My brief stint as comedic stock hustler like Left…
I once had a joke going on the boards, or my old CAPS blog, can’t remember where, that I was going to create “Shyster Capital Management” our tagline was “A Helping Hand In Your Pocket” and I would post nonsense like FB sure to hit a trillion, or Netflix to go to Zero. I had to shut it down as some people would always take me seriously. I would actually get emails asking when to buy or sell. I would tell them to watch the stock go up, down, down, up-up-up, down and wait for a diagonal burst to make your move, especially if it aligns with an eclipse or other solar event.
Very grateful for this board! Thank you, Saul et al.
Best,
BD
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Here’s a link to his Twitter Profile where you can see the beatdown he’s putting on HUBS…
https://twitter.com/CitronResearch?ref_src=twsrc%5Egoogle%7C…
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Here is a link to the Citron report. I have yet to read it, so I don’t yet know if it might have validity or be shoddy (or very shoddy as was the case for the Ubiquiti “total fraud report”).
http://citronresearch.com/wp-content/uploads/2017/12/HubsRep…
Beginning/summary of the report:
Seven reasons why $HUBS will trade down to $50 in
this rotation, fundamental value at $25/share.
-
No Pricing Power: HubSpot has reduced the price of its key product
offering to $0. Going freemium because they can’t keep up with
customer churn. Note: this is not $SHOP who although we have issues with
their marketing practices, was able to increase pricing on customers -
Transparency no more: For a company who has boasted about
transparency in corporate communication, they have now gone dark on
Wall Street and industry consultants. See addendum for KPI elimination
and Gartner. -
Partner decline: Major deceleration in agencies/business partners, the
lifeline of HUBS business. -
Growth hitting a wall: US biz growth level in serious decline- even
attendance at their Inbound Conference suffered greatly (from 35% to
10% growth). If you can’t make money in a country with 300 million
people and one language- good luck in Europe -
Corporate defections-Bad Business or Funky Business? : High-level
corporate defections cannot be ignored. Former top executives starting
related businesses – In the HubSpot Offices without disclosures. -
Broken business model? Selling campaign based ad software to SMB has
and will never be a scalable model. Worse HubSpot’s pivots into CRM is
moving into a wasp’s nest of competition with an inferior product. -
No IP: Lack of any real intellectual property or patents.
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That pantload …
I can’t stop laughing. BroadwayDan, thank you!
Dominic
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My pleasure, Dominic!
For what it’s worth, my personal theory is excellence wins the day. I let smarter Fools who can do things like math and business analysis do my heavy lifting. My investing style is like my flying style. I put a lot of trust in the guy who wears the United Pilot’s outfit and the logo on the plane.
Here’s one site that has 1732 Reviews of HUBS and it’s a 4.4 with countless raves…
https://www.g2crowd.com/products/hubspot/reviews
Here’s PC Mag’s review, “Excellent”…
https://www.pcmag.com/review/352587/hubspot
Here’s Software Advice… 1442 Reviews, 4.5 stars…
https://www.softwareadvice.com/marketing/hubspot-profile/
To Left’s credit, he whaled on OSTK’s recent run up. I do not say the guy is stupid or makes all fake points. But I stand hard by my assertion - He blows things wildly out of proportion, hypes his calls, exaggerates reasonable concerns and goes after stocks with big run ups. This is all fair game, of course, I just personally don’t like his style.
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Thanks for the investigative reporting, Welgard!
What is everyone doing about this? I think I will sell some with the hope to add back cheaper after Left goes on TV. But I dare not sell all. Past experience would indicate that HUBS will fall on Left’s attack…probably for a few days. But that’s the trouble with the stock market: in the short term, it doesn’t always do what it’s always done.
Bear
Bear’s hypothetical P/E ratio assuming a 30% margin for Hubspot was only about 27.6 as of yesterday, so a bit lower now (about 27.3). Hubspot is not crazy overvalued. Current Price to sales ratio on a TTM basis is currently about 8.2 (at a share price of $75.75).
http://discussion.fool.com/when-i-go-shopping-6-off-isn39t-enoug…
Bear’s explanation:
http://discussion.fool.com/marginal-thinking-32898226.aspx
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Post 35,000 on the board (unless someone else posts before I finish typing)
I have read through the Citron report now. I find the inclusion of slowing attendance growth for the Hubspot inbound marketing conference to be a bit silly. In 2015, there were 14,000 attendees, then 19,000 attendees in 2016 (35.7% Y-o-Y growth), followed by attendee growth of “only” 10.5% Y-o-Y to 21,000 attendees for 2017.
I think it is silly to think that indicates much of anything. How could a single conference accommodate much more than 21,000 people?
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I mean 34,600*
Volfan84 - it’s an utterly farcical point, the kind of thing someone includes when throwing everything and the kitchen sink at their argument. Beyond absurd. It shows that Left doesn’t have enough actual ammunition. It’s pure persuasion tactic - bombard people with enough talking points and they’ll say, “Well, he might be a little over-the-top but there must be something there”…
Also, as far as top execs leaving, how well has PayPal done since losing Elon Musk, Reid Hoffman and several other tech giants?
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As I write, a number of hours after the news release, Citron has only managed to drive a $77.35 stock down $1.45, or all of 1.9%. I wouldn’t worry too much.
Saul
I do like watching my CEOs in action. And to track how a company communicates. Will be interesting and informative to see how they handle this adversity. I’m hoping for an aggressive but respectful response. Thank Left for his concerns, he’s wrong because of A, B, C and D. He’s failing to factor in E through Z.
Just sold all my HUBS at a small profit. I’ll probably buy back in after the short attack takes hold. Or I may redeploy the money elsewhere. Haven’t decided yet. My HUBS position was small, around 2%, I’m not exactly in love with the company.
Wow, Hubs now up 50 cents after a short attack by Citron. Hard to imagine anything more bullish than that for a stock. “Just saying”, as the expression goes.
Saul
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Wow, Hubs now up 50 cents after a short attack by Citron. Hard to imagine anything more bullish than that for a stock. “Just saying”, as the expression goes.
It actually started going back up about the time Left got on TV. Apparently he wasn’t very convincing this time. In fact, I tuned in midway and after he said a couple very unconvincing things, the interviewer got bored and asked him about bitcoin.
Anyway, I’ll probably wait until tomorrow to start buying it back, just in case. Even if Left’s attack has already glanced off, maybe I’ll get lucky and see a cheaper price due to more sector churn.
Still, very interesting that so far Left doesn’t seem to be having the same affect that he did on UBNT and SHOP. I wonder if people have started to take his ideas for what they’re worth.
Bear
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I wonder if I should consider an investment strategy whereby I buy into companies that Left recommends selling.
…Marc
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One can only imagine the temper tantrum Left is having right now. Eye makeup must be a mess. Big difference here is the heat of the attack. The others were much harsher. He called Shopify outright fraud, which was ridiculous. Here it’s relatively moderate concerns and awful reasoning: HubSpot won’t work in Europe because it is not yet profitable in USA where we speak one language, so it won’t ever make money in Europe where they speak lots of different languages. And questioning the growth rate of a conference that racked up more than 21,000 attendees and featured an impressive lineup of elite speakers has to be among the all-time stupidest reasons ever given to bet against a company/stock.
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I sold all my HUBS a couple of weeks ago… It had nothing to do with Left or anything other than that I never really understood the company’s edge and that was the easiest way to raise a bit of cash.
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I think what we learned about Andrew Left is that he can help us make money.
- Wait until he attacks a stock.
- Buy a day or two after.
- Within two weeks the stock is back up.
I like the description of him " a pantfull " - very good description.
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