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I’m particularly sad to see Cloudflare’s stock having plummeted. Out of all the tech companies that IPO’d in the past few years, Cloudflare is one that the mos
by cj 5y ago
I’m particularly sad to see Cloudflare’s stock having plummeted.
Out of all the tech companies that IPO’d in the past few years, Cloudflare is one that the most potential to excel long term. Developer sentiment towards Cloudflare is comparable to Apple fanboys of the previous decade, and their products are legitimately good, backed with tangible assets (datacenters). They also have consistent growth quarter over quarter.
It’s surprising how many not as impressive companies (pre-revenue!) got away with entering the public market last year. Good company or bad company, they all seem to be sharing the same freefall.
(Disclosure, I own NET)
- brightball 5y agoIt’s across the board. Everything that isn’t completely entrenched is taking a beating. Hoping to take advantage of the dip to buy into some other great companies that I missed and buy more Cloudflare too.
- weatherlite 5y agoWhat's on your buy list? Asking for a friend.
- brightball 4y agoHa! I'm looking to get positions in Crowdstrike, ZScaler, Snowflake and Palantir if I can find good entry points. All have been too high to justify for the past couple of years. I've been in Cloudflare since about $30 and sold about 20-30% when it was at $200, so I figure I'm playing with house money there and have no plans to sell at any point. I would like to buy back though.
- version_five 5y ago> Out of all the tech companies that IPO’d in the past few years, Cloudflare is one that the most potential to excel long term If you think this, you should be happy and buy more of the stock. I don't know enough to say if I think it's a good idea, but if you do, don't be sad, buy more of it.
- OJFord 5y agoI both agree with you, and sympathise with GP because I'm bad at following your/my own advice. I suppose it comes down to conflicting opinions/strategies - I'd be way over-allocated in Amazon & Cloudflare (and probably 'tech' and the USA) if I always did.
- ip26 5y agoYou can think they are a good company while also being fearful they won't survive the macro.
- jshen 5y agoThey aren’t a good company if they can’t survive the macro.
- drakythe 5y agoThis is an astonishingly limited view of what makes a “good company”.
- jshen 5y agoNot really. If you can’t handle a down turn, how are you a good company?
- haswell 5y agoThis all gets a bit messy when trying to use a simple binary designation of "good" or "bad" to describe a company based on all factors about that company. Good companies come and go. Good companies of old no longer exist because the world changed. Some companies are good for awhile, and then lose their way. Nuance abounds. Not putting words in the parent commenter's mouth, but maybe a different way to say this is that Cloudflare is a good product. A product can be both great, and not viable under some conditions. The two are not mutually exclusive.
- 5y ago
- worlds1066 5y agoAgree, Cloudflare is doing some great stuff and always trying new things. Remember the Cloudflare TV Channel (if that still is around). I hope the loss in market cap doesn't hurt their innovation. (Disclosure also, I own NET)
- homero 5y agoThey just added more content https://www.cloudflare.com/platform-week/cloudflare-tv/ https://www.cloudflare.com/platform-week/cloudflare-tv/
- selectodude 5y agoI own some dumb pot companies that are trading at 1x revenue. This market has a ways to go but for people with capital to deploy it’s a gift. Lots of people who figured they could borrow against their rapidly skyrocketing holdings that are all receiving margin calls at the same time.
- tedmcory77 5y agoCare to share which ones?
- lumost 5y agoI love CloudFlare engineering, I love the products they build. I don't see how they become something more Akamai 2.0 with a similar market size.
- systemvoltage 5y agoThey can buy Oxide Computer and become a truly back-to-1997 retro-futuristic cloud company. Hindsight is 20/20. In gradient descent optimization, sometimes it is important to take backwards steps to get out of the local optima. We're going to look at AWS/GCP/Azure with the way manner we currently look at IBM/Cisco/Oracle. I also have no idea what I am talking about. As far as them going bankrupt seems pretty unlikely as some people are saying. Remember - Paypal, Yahoo, Google, etc. amongst many survived through the dot com bust. Cloudflare can generate positive cashflows anytime they want by stopping future development.
- tmaly 5y agoWhat do you see version 2.0 of AWS/GCP/Azure looking like?
- systemvoltage 5y agoBack to on prem: https://www.economist.com/business/2021/07/03/do-the-costs-of-the-cloud-outweigh-the-benefits https://www.economist.com/business/2021/07/03/do-the-costs-o... Battle of cloud is intensifying: https://www.economist.com/business/the-battle-of-the-computing-clouds-is-intensifying/21806813 https://www.economist.com/business/the-battle-of-the-computi... HIGHLY recommend looking at Stackoverflow architecture: https://stackexchange.com/performance https://stackexchange.com/performance https://nickcraver.com/blog/2016/02/03/stack-overflow-a-technical-deconstruction/ https://nickcraver.com/blog/2016/02/03/stack-overflow-a-tech... Technology and society has ways to build up layers of abstraction. It takes some realization, hindsight, genius and humbleness to cut down the overgrowth and pick the fruits, plant new seeds.
- sooheon 5y ago
- rvz 5y agoSo did I, after calling it on their IPO prospectus at the time. [0] It was a good ride from <$20 and still is a good stock to buy even at these prices now. But at one point [1] it was hyped very quickly and had to sell most of it at >$200 after asking and reading the responses from this [1] it was really not a surprise to see through the hype at the time and why it crashed so quickly. [1] [0] https://news.ycombinator.com/item?id=20707306 https://news.ycombinator.com/item?id=20707306 [1] https://news.ycombinator.com/item?id=29355360 https://news.ycombinator.com/item?id=29355360
- DoctorOW 5y ago> Developer sentiment towards Cloudflare is comparable to Apple fanboys of the previous decade I consciously stay out of negative threads about Cloudflare because I feel way too attached to them.
- _uy6i 5y agoI know nothing about NET other than the 30seconds I just spent looking at their financials - they managed to triple their revenue over three years but they seemed to have managed to about triple their losses over the same time period and they trade at ~30x sales, MSFT is ~11x, guess people believe they’ll be earning a ~$2b/year in the next several years?
- deleted 5y ago[deleted]
- sulam 5y agoI hated a long time on AMZN too. Regretted it. NET looks similar to me, albeit it won’t be taking over 30% of the economy of course.
- almost_usual 5y agoWonder how many people said that about the online bookstore.
- weatherlite 5y agoThat startup math worked out fine until a few months ago. The common wisdom was tech companies can always fire personnel when they will want to become profitable and until then increasing expense to get more market share is the thing to do. It's not completely baseless but obviously we now know too many companies rode this momentum and built businesses that might be unsustainable. We will see.
- mmaunder 5y ago$212M quarterly revenue with a $41M loss. In this climate you better have a solid PE as a public company or you’re in deep shit. This is the second dot-com bust. I worked at eToys for the first. $6B market cap and was delisted. Assets sold off for $2M when liquidated. Make no mistake about how bad things are about to get.
- mbesto 5y agoeToys sold physical products with gross margins that are hilariously very different from Cloudflare's. https://a16z.com/2015/05/15/a16z-podcast-why-saas-revenue-is-worth-more-than-traditional-software-sales/ https://a16z.com/2015/05/15/a16z-podcast-why-saas-revenue-is...
- sulam 5y agoI lived through the dotcom bust, the financial crisis and now this. Long term it isn’t going to be any worse than they were. In 2-3 years we will be recovering. I feel bad for people who can’t wait out a market cycle, but that’s what this is, somewhat exacerbated by the Fed’s actions leading up to this point.
- scarface74 5y agoIt took 15 years for Nasdaq to recover from the dot com bust. The S&P 500 was flat from 2000-2010.
- jshen 5y agoI’m not sure what you’re implying. In terms of investing, you should not wait until it recovers, you want to invest near the bottom and on the way up. The money you have in now should be held.
- scarface74 5y agoI’m implying that it wasn’t “2-3 years” as the parent poster alluded to.
- nradov 5y agoA plummeting stock won't prevent Cloudflare from excelling, unless they are short of capital and have an urgent need to issue a secondary stock offering.
- metadat 5y agoIt's a great time to buy more
- lettergram 5y agoI bought at the peak for cloudflare and had a similar thought process. After losing 15-20%, I decided to sell. Figured I'd buy again after it dropped further. Guessing when it's 80-90% down from peak I'll end up repurchasing.
- neogodless 5y agoI strongly expect it to drop to 79% off peak before a very rapid rise back up. Best you don't miss it waiting for 80...
- neogodless 4y agoHey @lettergram, it's 80.9% off peak! BUY BUY BUY!
- bfz 5y agoWorth recalling there are >5 rate hikes priced in for the remainder of the year, and that the problem with CloudFlare isn't just the speculation, but for their legitimate business, the credit fuelling many of their customers, which are significantly concentrated in the tech sector. The coming tightening of hiring will also inevitably mean the tightening of infrastructure budgets. What built CloudFlare's excellent sales pipeline can just as easily obliterate it, but in any case will certainly leave at least a major dent. It's probably a great time to be getting into finops, and I don't think CloudFlare's fair value is anywhere remotely near $18bn. I think we'll discover before the end of this year just how many of the tech darlings were largely side effects of the poisonous sandbox constructed by the US fed.
- chollida1 5y ago> I think we'll discover before the end of this year just how many of the tech darlings were largely side effects of the poisonous sandbox constructed by the US fed ?? Poisonous sandbox? Is this an awkward way of referring to money printing? Or the low interest rate environment?
- bfz 5y agoIt warms my heart to think I could still be graded on language use so late in life. How would you describe it?
- augstein 5y agoIts a perfect metaphor for the kind of environment the FED created in the last few years for risk assets imo.
- triceratops 5y agos/FED/Fed/g it's not an acronym for anything. It's short for the Federal Reserve.
- thematrixturtle 5y ago
- sulam 5y agoI also own NET and will likely be treating this dip as an opportunity to load up more.
- yalogin 5y agoYou can have similar sentiments towards a lot of the companies. For example zoom, twilio come to mind. Point is all of them across the board have been inflated.
- presspot 5y agoUh, correction: I'm pretty sure Cloudflare doesn't own any datacenters. They lease space in other people's data centers
- dheera 5y agoIt's quite entertaining that when electronics and clothes go on sale people go buy buy buy, but when stocks go on sale people sell like crazy. People are weird.
- tomjakubowski 5y agoEvery one of those stock sales has a buyer too.
- alasdair_ 5y agoElectronics and clothes still work when the company is bankrupt.
- Ekaros 5y agoNot sure about all of modern electronics with call home functions and services... They might not...
- scarface74 5y agoThis is endemic of the problem of the current tech ecosystem. Emphasizing “growth” over “profitability”. Why is it surprising that a company that has loss money over the past five quarters is seeing its stock tank?
- gen220 5y agoI'm a NET watcher/holder, I've read most of their earnings call transcripts and SEC docs since the S-1. IMO, they were way overvalued at their peak on fundamentals. With the recent slide, I think they're "far" undervalued, to an extent that varies based on how much value one attributes to present and future tailwinds that cannot be encoded on a balance sheet as future receivables. Boiling it down, I think institutional investors do not fundamentally understand Cloudflare's technical raison d'etre. As you implied, NET gets lumped in with its IPO class of "tech stocks", but is fundamentally different, for the reasons you gave. They have a legitimate moat, differentiated technical talent, and are fishing in a growing pond. Similar to the Amazon story, it seems inevitable that a company shaped like NET is going to make oodles of money in the next ten years provided they have the right leadership and capital structures. NET has all that, and a several-years head start. On and up.
- brundolf 5y agoThis may be the wrong place to ask, but if a regular person wanted to buy stock in an individual company or two, and mostly hold it (not day-trade), what's the right channel for that? Might put some fun-money in Cloudflare
- mypalmike 5y agoAny online broker would suffice. Ameritrade, E-Trade, Fidelity, etc. There are many to choose from.
- rizzom5000 5y agoLots of online brokers will let you trade individual securities. The used to be more fees associated, but lots of places now allow zero-fee trading as well. ymmv https://www.nerdwallet.com/best/investing/online-brokers-for-beginners https://www.nerdwallet.com/best/investing/online-brokers-for...
- londons_explore 5y agoPlease don't call it zero-fee. Try buying $1000 worth of any stock and immediately selling again. Notice how you now only have $980. You effectively paid a $20 fee. It was just a hidden fee in the spread caused by whoever executed your trades.
- ab-dm 5y agoI'm not sad at all, it's just done on sale.
- homero 5y agoI own Cloudflare too, it'll recover long term
- kortilla 5y agoOpposing view. Cloudflare doesn’t own anything significant in the form of data centers. Having small rented footprints at IXPs across the globe is not an asset, it’s just a cost. I’m not downplaying the difficulty of getting it setup but there is no intrinsic value in having it if demand for their product collapses. > Developer sentiment towards Cloudflare is comparable to Apple fanboys of the previous decade This is far from true. People begrudgingly pay protection money to cloudflare to protect themselves from DDoS attacks. Very few significant operations depend deeply on the cloudflare stack. It has not been the AWS alternative it set out to be with the launch of its lambda like edge compute products. An AWS, Azure, or Google DDoS protection product could eat Cloudflare’s market in a hot minute. Cloudflare can’t escape being a “feature” of a cloud provider. (Disclosure, I sold out of Cloudflare at the end of the year when it failed to gain significant traction.)
- onion2k 5y agoCloudflare doesn’t own anything significant in the form of data centers. Having small rented footprints at IXPs across the globe is not an asset, it’s just a cost. I’m not downplaying the difficulty of getting it setup but there is no intrinsic value in having it if demand for their product collapses. I don't understand this point. If there's a risk that demand will collapse isn't it better not to own the data centers? By renting CF can reduce their costs quickly in the face of falling demand. That's a feature. An AWS, Azure, or Google DDoS protection product could eat Cloudflare’s market in a hot minute. Cloudflare can’t escape being a “feature” of a cloud provider. This is also true of any other software company though - at some point a bigger company might offer whatever product as a feature. It's just a risk of building a software company - what we build is largely straightforward to copy. That doesn't mean there's no value in software as a product though.
- kortilla 4y ago> there's a risk that demand will collapse isn't it better not to own the data centers? By renting CF can reduce their costs quickly in the face of falling demand. That's a feature. But it’s not an asset. Do you know what an asset is?
- 5y ago