Research

Box announces intention to offer $300 million of convertible senior notes, citing future acquisitions as one potential use

View above about Research Category: Management for Box, Inc.

Box, Inc. (NYSE: BOX), a leader in cloud content management, today announced that it intends to offer, subject to market conditions and other factors, $300 million aggregate principal amount of convertible senior notes due 2026 (the "notes") in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Box also intends to grant the initial purchasers of the notes an option to purchase up to an additional $45 million aggregate principal amount of the notes.

Box intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions described below. Box intends to use the remainder of the proceeds from this offering for working capital and other general corporate purposes, such as repayment of debt and potential acquisitions. While Box has not designated any specific uses and has no current agreements with respect to any material acquisition, Box is examining potential acquisitions. It is possible that Box may not be able to complete such acquisitions on favorable terms or complete them at all. Box does not anticipate that any of these potential acquisitions would be "significant" for purposes of Rule 3-05 of Article II of Regulation S-X.
Research

Billionaire tech investor Phillipe Laffont described how the outliers in 10% of his fund matter more than the other 90%

View above about Model Issue: Value of Quantifying Stories in Scenarios

I only made 2 big calls in the first 10 years or so but those were enough. If 90pct of your book goes up 8pct/year (historical public returns) and 10pct doubles, then you are up twice as much as the market and that’s a big number as it compounds.
Research

Bill Miller's "probabilistic value investing" approach motivated him to buy Bitcoin in 2015

View above about Model Issue: Value of Quantifying Stories in Scenarios

Stylized views of value investing often invoke low accounting multiples, but we try to take a broader definition of “value” in our pursuit of assets trading at substantial discounts to their intrinsic value. Our approach is a probabilistic one, meaning that we try to think about various potential states of the future that could affect an asset’s value. We then determine what an asset could be worth under a handful of representative scenarios, multiply each scenario’s value by the probability we think it could occur, and sum up the values to get a “central tendency of value.” Our thought process on Bitcoin is a representative example of our probabilistic value approach, even though the asset may not hit the radar screens of more traditional value investors. So, we will first briefly introduce Bitcoin and then talk about a framework for valuation.
Research

Billionaire Howard Marks says value investors shouldn't avoid growth companies but instead should forecast ranges for their peak economics

View above about Model Issue: Value of Quantifying Stories in Scenarios

Valuing it (Growth Company B) requires guesses about the ultimate success of its products; its ability to come up with new ones; the response from competitors and the targeted industry; its growth runway; and the extent to which it will be able to increase profitability once doing so becomes its focus. Company B seems more conceptual in nature and more dependent on developments in the distant future that are subject to significant uncertainty, so valuing it might have to be done on the basis of broad ranges for future sales and profitability rather than reliable point estimates.
Research

We could see the average sub lifetime increase for ADT with the recent acquisition of CellBounce helping to ease the switch from 3g to 4g

View above about Model Issue: Average sub lifetime in months by market and value prop and org ADT Inc. and improvement over alternatives 'Radical improvement' and for customer 'Current Residential Sites'

Research Category: Product Features and Roadmap for ADT Inc.
ADT on Thursday announced that it has closed its previously announced acquisition of CellBounce after testing the company’s proprietary 3G-to-4G radio conversion technology, which has now been certified for use on AT&T’s 4G cellular network...The user-installable device is expected to reduce the need for technicians to perform the upgrade prior to the 3G sunset. The device will also be made commercially available to third parties, allowing the larger industry to benefit from the technology.
Research

Use the BPN Input Form to Update the Model Assumptions

View above about Research Category: Input Table for ADT Inc.

The BPN Input table below allows users to iterate on assumptions using adjustable center points and ranges, to update the BPN model and produce a new tableau workbook which reflects the updated model assumptions.
Research

Odds for future return on BOX Equity are driven by judgments for peak economics influenced by different levels of differentiation in different addressable markets

View above about Model Issue: BOX Equity Value

Research Category: Input Table for Box, Inc.
The table below summarizes the main judgments driving our odds of future financial results and investor returns. Each of these judgments is supported by research attached directly to it, and you can view that research in the posts that follow. If you have a log-in to BPN Writer, our research and modeling software environment, you can click the table below to open it in BPN Writer. Then you can open the research supporting each cell, and you can change any of the cells yourself and recalculate the odds for financial results and returns, which you can then explore in various interactive charts, each with a different perspective on your updated cases for the future.
Research

Box has 60.72M current registered, non-paying users as of October 31, 2020

View above about Model Issue: Current Registered Users for Box, Inc.

Research Category: Customer Traction and Sales Efficiency for Box, Inc.
Our user base included 75.9 million registered users as of October 31, 2020. We define a registered user as a Box account that has been provisioned a unique user identification number. As of October 31, 2020, 20% of our registered users were paying users who registered as part of a larger enterprise or business account or by using a paid personal account. There were 15.18M current paying users.
Research

Google's CEO tells employees that they should be in their assigned office at least 3 days per week after pandemic lockdown ends

View above about Model Issue: Percent of US office employees in an office on a peak day after paradigm shift

Other competitive tech companies, such as Twitter and Facebook, have said employees can work remotely “forever” or over the next decade, allowing employees to move to other regions if they wanted to. Google employees had hoped for similar flexibility. But the Dec. 14 memo suggests Google will have stricter requirements than these competitors. Employees in regions that aren’t at high risk levels will be expected to spend a minimum of three days in the office and two days at home or wherever they work best, Pichai’s email states. They’ll also have the option to book spaces for collaboration for up to a dozen people and outdoor spaces for larger team gatherings. It will also have “reservable” desks for employees who want to work in a quiet space, Pichai’s note states.
Research

ADT could gain additional wallet share as they move into the wearables space

View above about Model Issue: Odds that ADT is a radical improvement for its current residential customers

Research Category: Product Features and Roadmap for ADT Inc.
Smart wearable company invisaWear and ADT are collaborating to introduce more advanced mobile safety and monitoring features into invisaWear’s ground-breaking line of wearable personal safety accessories. The partnership brings together ADT’s mobile safety platform and invisaWear’s unique line of lifestyle-inspired safety devices. ADT will also power invisaWear’s companion app, allowing users who feel unsafe to discreetly connect - by voice or SMS chat - with ADT.