6 ms·

A rising tide lifts all boats. Maybe a decent time for a capex heavy business with mediocre metrics to go public?

by neom 6y ago

poorman 6y ago
Mediocre metrics is generous from my experience working with them.
deepGem 6y ago
The tide might lose steam if Biden wins the election. Though I doubt there will be any carnage similar to the dot com bust. For one, interest rates are super low and I don't see them rising anytime soon, even if the Fed raises rates, the ceiling will be around 3-4%. The Covid induced tech euphoria might die down but I am willing to wager that won't be the case. People's habits once changed are very hard to fall back, especially when the new habits have a net positive economic impact. Time saved in commuting, air travel etc. The events industry might totally die down though. So there will be some negative impact as well. Other than these specific verticals such as events and tourism, I bet the market will favour tech innovations now more than ever. So yeah, this is probably the right time for any tech company to go public, not just those with mediocre metrics.
- shuntress 6y ago
  Funny, if you just re-write your post with the opposite points, it reads exactly the same and has the same apparent merit.: The tide won't lose steam if Biden wins the election. Though there will be carnage similar to the dot com bust. For one, interest rates are super low but will rise sometime soon, when the Fed raises rates at least 3-4%. The Covid induced tech euphoria might die down and I am willing to wager that will be the case. People's habits once changed may change again, especially when the new habits have a net positive economic impact. Time saved in commuting, air travel etc. The events industry might totally boom though. So there will be some positive impact as well. Other than these specific verticals such as events and tourism, I bet the market will sour on tech innovations now more than ever. So yeah, this is probably the right time for any tech company to go public, not just those with mediocre metrics.
  - somebodythere 6y ago
    We didn't manage to raise rates to 2.5% in the longest economic expansion of modern history and you are thinking that they will be hitting 3-4% "soon"?
- AsyncAwait 6y ago
  > The tide might lose steam if Biden wins the election. Are you suggesting Biden will increase corporate taxes? Because if so, I seriously doubt it. Biden agrees with Trump on 70% of the issues if not more.
  - deepGem 6y ago
    Yep, in addition to increasing corporate taxes to 28%, Biden's plan is to ensure that corporations will pay at least a minimum tax, regardless of all the deductions they can avail. https://in.news.yahoo.com/joe-bidens-tax-plan-may-wallop-the-stock-market-heres-one-disturbing-estimate-173751982.html https://in.news.yahoo.com/joe-bidens-tax-plan-may-wallop-the...
    - AsyncAwait 6y ago
      Yeah, except Biden is a moderate Republican, so I doubt it. It's a neat primary rhetoric for sure.
      - NortySpock 6y ago
        He's listed as a Democrat, though he may be to the right of where you personally want him to be. Let's not confuse the issue.
        AsyncAwait 6y ago
        DPRK is named as democratic too, is it? Is it shocking to me how many people take what people name themselves at face value. If I put F1 driver on my badge does that make me one? Obama even admitted to basically being a moderate Republican from the 80s[1], is just that the Republicans have moved so far to the right that what they used to be in the 80s is now seen as on the left. I know there's this perception of left being everywhere, but in reality it's just a bunch of college students being boosted by Jordan Peterson for his own benefit. The actual politics of the U.S. have been moving further and further to the right for decades now. 1 - https://www.youtube.com/watch?v=677elaGIsKU https://www.youtube.com/watch?v=677elaGIsKU
shuntress 6y ago
A rising tide lifts all boats. What about boats that are anchored or moored?
- dmurray 6y ago
  Those too. You put enough extra length in the anchor chain to make sure of it. Did you think that moored boats all sank when the tide came in?
- aspenmayer 6y ago
  For that matter, what about the wrecks on the bottom of the ocean, and the survivors bobbing on the surface?
- zupzupper 6y ago
  >What about boats that are anchored or moored? Well how else were you going to wash the sides down?
- shuntress 6y ago
  Not that anyone will see this but regarding this comment's siblings: It seems like you don't understand the metaphor unless you each mean to imply that The Economy goes through frequent regular cycles of significant expansion and contraction where every expansion reaches a consistent, predictable high point before contraction brings it back down to a consistent predictable low point. But it can still accurately represent the people who are "left behind" in the economy. You cannot just say "Ah yes, the tide is going up. Therefor everyone is safe and dry in their boats as they rise with the tide" as an excuse to ignore people who need help.
old-gregg 6y ago
The answer sits on the 4th page: We have increased the percentage of our revenue from segments which we believe benefit from attractive growth dynamics. In 2019, over 85% of our revenues came from our Multicloud Services and Apps & Cross Platform segments, which we refer to as our “Core Segments”. In contrast, in the twelve months ended September 30, 2016, less than 10% of our revenue came from our Cloud Office and Managed Cloud Services service offerings. Basically Rackspace went from being a hosting company with "fanatical support" to someone who manages your AWS account and your cloud apps. They still offer their traditional bare metal servers, and they have their cloud, but that's not where the growth is.
- otoburb 6y ago
  Looks like gross profit margins decreased in aggregate by almost 4% in both "growth" categories of their Core Revenue (page 79). Doesn't look good for future margin expansion opportunities.

A rising tide lifts all boats. Maybe a decent time for a capex heavy business with mediocre metrics to go public?

by neom 6y ago

A rising tide lifts all boats. Maybe a decent time for a capex heavy business with mediocre metrics to go public?

poorman 6y ago

Mediocre metrics is generous from my experience working with them.

deepGem 6y ago

The tide might lose steam if Biden wins the election. Though I doubt there will be any carnage similar to the dot com bust. For one, interest rates are super low and I don't see them rising anytime soon, even if the Fed raises rates, the ceiling will be around 3-4%. The Covid induced tech euphoria might die down but I am willing to wager that won't be the case. People's habits once changed are very hard to fall back, especially when the new habits have a net positive economic impact. Time saved in commuting, air travel etc. The events industry might totally die down though. So there will be some negative impact as well. Other than these specific verticals such as events and tourism, I bet the market will favour tech innovations now more than ever. So yeah, this is probably the right time for any tech company to go public, not just those with mediocre metrics.

shuntress 6y ago
Funny, if you just re-write your post with the opposite points, it reads exactly the same and has the same apparent merit.: The tide won't lose steam if Biden wins the election. Though there will be carnage similar to the dot com bust. For one, interest rates are super low but will rise sometime soon, when the Fed raises rates at least 3-4%. The Covid induced tech euphoria might die down and I am willing to wager that will be the case. People's habits once changed may change again, especially when the new habits have a net positive economic impact. Time saved in commuting, air travel etc. The events industry might totally boom though. So there will be some positive impact as well. Other than these specific verticals such as events and tourism, I bet the market will sour on tech innovations now more than ever. So yeah, this is probably the right time for any tech company to go public, not just those with mediocre metrics.
- somebodythere 6y ago
  We didn't manage to raise rates to 2.5% in the longest economic expansion of modern history and you are thinking that they will be hitting 3-4% "soon"?
AsyncAwait 6y ago
> The tide might lose steam if Biden wins the election. Are you suggesting Biden will increase corporate taxes? Because if so, I seriously doubt it. Biden agrees with Trump on 70% of the issues if not more.
- deepGem 6y ago
  Yep, in addition to increasing corporate taxes to 28%, Biden's plan is to ensure that corporations will pay at least a minimum tax, regardless of all the deductions they can avail. https://in.news.yahoo.com/joe-bidens-tax-plan-may-wallop-the-stock-market-heres-one-disturbing-estimate-173751982.html https://in.news.yahoo.com/joe-bidens-tax-plan-may-wallop-the...
  - AsyncAwait 6y ago
    Yeah, except Biden is a moderate Republican, so I doubt it. It's a neat primary rhetoric for sure.
    - NortySpock 6y ago
      He's listed as a Democrat, though he may be to the right of where you personally want him to be. Let's not confuse the issue.
      - AsyncAwait 6y ago
        DPRK is named as democratic too, is it? Is it shocking to me how many people take what people name themselves at face value. If I put F1 driver on my badge does that make me one? Obama even admitted to basically being a moderate Republican from the 80s[1], is just that the Republicans have moved so far to the right that what they used to be in the 80s is now seen as on the left. I know there's this perception of left being everywhere, but in reality it's just a bunch of college students being boosted by Jordan Peterson for his own benefit. The actual politics of the U.S. have been moving further and further to the right for decades now. 1 - https://www.youtube.com/watch?v=677elaGIsKU https://www.youtube.com/watch?v=677elaGIsKU

shuntress 6y ago

A rising tide lifts all boats. What about boats that are anchored or moored?

dmurray 6y ago
Those too. You put enough extra length in the anchor chain to make sure of it. Did you think that moored boats all sank when the tide came in?
aspenmayer 6y ago
For that matter, what about the wrecks on the bottom of the ocean, and the survivors bobbing on the surface?
zupzupper 6y ago
>What about boats that are anchored or moored? Well how else were you going to wash the sides down?
shuntress 6y ago
Not that anyone will see this but regarding this comment's siblings: It seems like you don't understand the metaphor unless you each mean to imply that The Economy goes through frequent regular cycles of significant expansion and contraction where every expansion reaches a consistent, predictable high point before contraction brings it back down to a consistent predictable low point. But it can still accurately represent the people who are "left behind" in the economy. You cannot just say "Ah yes, the tide is going up. Therefor everyone is safe and dry in their boats as they rise with the tide" as an excuse to ignore people who need help.

old-gregg 6y ago

The answer sits on the 4th page: We have increased the percentage of our revenue from segments which we believe benefit from attractive growth dynamics. In 2019, over 85% of our revenues came from our Multicloud Services and Apps & Cross Platform segments, which we refer to as our “Core Segments”. In contrast, in the twelve months ended September 30, 2016, less than 10% of our revenue came from our Cloud Office and Managed Cloud Services service offerings. Basically Rackspace went from being a hosting company with "fanatical support" to someone who manages your AWS account and your cloud apps. They still offer their traditional bare metal servers, and they have their cloud, but that's not where the growth is.

otoburb 6y ago
Looks like gross profit margins decreased in aggregate by almost 4% in both "growth" categories of their Core Revenue (page 79). Doesn't look good for future margin expansion opportunities.