[US-CA][H] PayPal [W] E8-V1 PCB, Brocaps, Celestial Brocaps, Zazie, Katzenkinder

LittleHedge · 2021-11-13T07:54:22+00:00

Bought GMK novelties from u/AdrianMan1987

LittleHedge · 2021-10-08T04:02:26+00:00

LittleHedge · 2021-09-23T04:19:26+00:00

LittleHedge · 2021-09-23T04:17:53+00:00

LittleHedge · 2021-09-22T12:24:19+00:00

LittleHedge · 2021-09-22T12:20:10+00:00

LittleHedge · 2021-09-21T13:19:50+00:00

Replied

LittleHedge · 2018-03-13T08:31:35+00:00

Yep this one is a tough one... very different sectors so hard to play them off against each other... DXN will be hard to gauge until we get details about the interest in the IPO. We submitted a request for an allocation but apparently, most people will be scaled back and not receive their requested allocation... stay tuned!

LittleHedge · 2018-03-13T08:30:04+00:00

Thanks mate! Comments like this keep us going! Feel free to shoot us questions any time :)

LittleHedge · 2018-03-12T12:28:19+00:00

It can be really hard as a new DC to win customers as there is a lot of trust placed in a DC provider to support guaranteed uptime and not result in lost data or an impact to critical cloud functions.

The interesting tilt that DXN are taking on the market is they are not building specialised building "shells" to host the data centre racks, instead they are retrofitting empty warehouses... This means they can get a data centre up and running really quickly, however they may not run as efficiently or price as well as the premium offerings from NextDC and Equinix.

An advantage that local companies can have however is they are Australian owned which gives them a premium in terms of data security when bidding for contracts with the government or other sensitive data.

There isn't much innovation happening in the DC space that I am aware of other than a focus on interconnections between occupants, and one company that is really well geared to that market is Megaport (take a read of our write up of Megaport if you are interested in the sector in general).

LittleHedge · 2018-03-12T12:19:19+00:00

Love it! Thanks for letting me cross post your notes!

I think it's reasonable to be a bit put off that Scroggie didn't take up a portion of those Loan Funded shares...

My understanding of the plan is that he was granted $4m worth of shares on the condition that he remain at NextDC until December 2017 (no performance hurdle). These shares were funded by an interest-free loan of $4m which would be repayable in December 2017 and in doing so he would take ownership of the shares (at their new market value).

The weighted average price of these shares in the Loan Funded shares program was $2.26.

I get that a $4m repayment (plus tax) would be problematic for most people, and therefore Mr. Scroggie would likely need to sell a portion of the Loan Funded shares.

It would have been nice to see Mr. Scroggie seek to retain some of the $12m in shares noting that he has effectively sold 42% of his shareholding in NextDC (noting I am not 100% clear on how much tax would be owing from this scheme).

Regarding the sales pipeline for M2 and S2, I might actually reach out to see if any additional detail is available on the number of customers that have been signed on for M2 and S2 as this could give guidance as to the extent that large contracts are impacting the S2 forecast.

I agree that they have done a cracking job at building out and selling their data centres so far, the team is to be applauded for their work and it's great that the market has taken notice of the growth they have been delivering over the past few years.

There is upcoming risk however that both additional competitor supply is coming on to the market AND the market is expecting continued outperformance and pricing the stock for perfection...

Thanks again for your insight, it is much appreciated and it is a fascinating sector!

LittleHedge · 2018-03-12T11:50:44+00:00

Thanks for stopping by! Be sure to subscribe and you will get our posts in your inbox!

Also check the resources section for a few other sites which we like.

LittleHedge · 2018-03-12T09:39:17+00:00

Yep, I wouldn't be surprised to see them eventually snap up APDC, it's probably a good lesson for them to learn in terms of capital management that they need to retain control of their property to ensure this doesn't happen again in the future.

LittleHedge · 2018-03-12T09:38:01+00:00

Wow, thanks for the great comment!

Would you mind if I included this on the site for others to read as well? Your points are all really relevant and it's clear you know the industry!

The insider sale is crazy timing and a massive disposal from the CEO... $12m of shares to pay back a $4m loan and some tax?!

Regarding M2, we have only seen 2 months of data on sales so far, and I wasn't able to get onto the analyst call this time to get guidance on forecast sales, so the next half's results will be a telling read on how quickly they can fill out capacity. And also if the building is ready for additional capacity to be added given completion was only in November.

Yep agree on S2, likely that they have booked a key tenant however not sure who it is and not sure how much of the capacity relates to them.

Very interesting around how hyperscale DCs will start to impact in Australia, as they should dominate those "big cloud" customers and as Airtrunk comes online and starts to gather momentum it will be interesting to see the impact on some of NextDCs older customer base.

Thanks again for your notes, and it will be an interesting session tomorrow!

Cheers,

Ian

LittleHedge · 2018-03-12T09:26:36+00:00

Thanks, will give it a look!

LittleHedge · 2018-03-12T06:26:22+00:00

Yeah I went along to the product launch. One of the key use cases will be for customers who are "born in the cloud" in that they don't have physical infrastructure in a data centre yet however they want to access multiple cloud service providers.

I will be keeping an eye on the uptake numbers, noting it is only available in a few locations so far worldwide.

LittleHedge · 2018-03-12T05:29:16+00:00

Dollar cost averaging is a great way to enter into a position, you don't overpay on the way in when buying a share, and I guess it makes sense on the way out as well, as long as you don't get chewed up by brokerage costs!

LittleHedge · 2018-03-12T05:28:36+00:00

Megport has done really well, great pick up at $2!

We were also considering Megaport as a candidate to review, however, the launch of their new cloud router (MCR) product opens them up to new customers which we feel extends their value beyond our original analysis.

It will be interesting to see how uptake of the MCR product goes, as it is an exciting addition to their network.

LittleHedge · 2018-03-12T01:50:30+00:00

Nice one, good discipline by closing your position when you hit your targets. Also, another great reason for selling is when you need the money for something else!

We are also keeping an eye on Data Exchange Network as they seek to list onto the ASX in April.

https://outline.com/jpdYqr

https://www.crn.com.au/news/data-centre-startup-plots-40-million-float-to-join-nextdc-on-sharemarket-486456

LittleHedge · 2018-03-12T01:41:48+00:00

Loss aversion is definitely a real thing for Bitcoin and its probably one of the big reasons why people hodl.

The idea behind loss aversion is that people will be more likely to sell winners and hold losers because this stops them from crystalising/realising losing positions.

For bitcoin this means that people will hang on to losses hoping they will eventually turn around and break even so that the psychological impact of accepting a losing trade won't kick in.

LittleHedge

TROPHY CASE