Alex Bilzerian
The Platonic view of mathematics:
tweet
The Platonic view of mathematics:
@alexbilz Where you are wrong is here:
Once proven, a mathematical theorem is eternally true.
It should be:
A mathematical theorem is eternally true regardless of someone knowing a proof. tweet
twitter.com
undefined
undefined
Offshore
Photo
Stock Analysis Compilation
The London Company on Gates Industrial $GTES US
Thesis: Gates Industrial, with strong free cash flow and a leading market position, offers a solid investment opportunity with limited downside at an attractive valuation
(Extract from their Q2 letter) https://t.co/gW9A0gmxEl
tweet
The London Company on Gates Industrial $GTES US
Thesis: Gates Industrial, with strong free cash flow and a leading market position, offers a solid investment opportunity with limited downside at an attractive valuation
(Extract from their Q2 letter) https://t.co/gW9A0gmxEl
tweet
Offshore
Photo
Alex Bilzerian
I think it was @DulwichQuantum that started this joke a couple years ago.
I use it far too much.
tweet
I think it was @DulwichQuantum that started this joke a couple years ago.
I use it far too much.
The same physicists that brought you this are now nitpicking over the mere mention of "negative probability". https://t.co/MiSFDoPPXQ tweet
Offshore
Photo
App Economy Insights
🏈 Sports betting is booming!
Who's winning the big bucks?
Let's visualize:
🛡️ Fan Duel $FLUT
👑 DraftKings $DKNG
🦁 BetMGM $ENT.L
📺 ESPN BET $PENN
Learn who's poised to dominate the category. 👇
https://t.co/ddYjq6iaWu
tweet
🏈 Sports betting is booming!
Who's winning the big bucks?
Let's visualize:
🛡️ Fan Duel $FLUT
👑 DraftKings $DKNG
🦁 BetMGM $ENT.L
📺 ESPN BET $PENN
Learn who's poised to dominate the category. 👇
https://t.co/ddYjq6iaWu
tweet
AkhenOsiris
$ZS Go get 'em 🐯
Zscaler Appoints Security Industry Veteran Adam Geller as Chief Product Officer to Scale Cloud Security Leader to $5 Billion ARR and Beyond
“Zscaler has consistently proven that it secures, simplifies, and transforms businesses who adopt its amazing platform," said Mr. Geller. “I am thrilled to take on the opportunity to grow Zscaler beyond $5B in ARR through our current and future product offerings powered by AI & ML. Zscaler sits at the confluence of users, devices, and applications and this offers unparalleled insights into identity, behavior, and intent. With access to one of the largest and richest datasets from billions of transactions, alerts, and context per day, we are able to deliver services that solve our customer’s IT challenges and give them the confidence they need to digitally transform their businesses.”
tweet
$ZS Go get 'em 🐯
Zscaler Appoints Security Industry Veteran Adam Geller as Chief Product Officer to Scale Cloud Security Leader to $5 Billion ARR and Beyond
“Zscaler has consistently proven that it secures, simplifies, and transforms businesses who adopt its amazing platform," said Mr. Geller. “I am thrilled to take on the opportunity to grow Zscaler beyond $5B in ARR through our current and future product offerings powered by AI & ML. Zscaler sits at the confluence of users, devices, and applications and this offers unparalleled insights into identity, behavior, and intent. With access to one of the largest and richest datasets from billions of transactions, alerts, and context per day, we are able to deliver services that solve our customer’s IT challenges and give them the confidence they need to digitally transform their businesses.”
tweet
AkhenOsiris
Good or bad? Break it up 🤣
tweet
Good or bad? Break it up 🤣
AMAZON WINS PARTIAL DISMISSAL OF US FTC'S ANTITRUST LAWSUIT-COURT RULING - First Squawktweet
AkhenOsiris
$DDOG
DA Davidson Upgrades Datadog to Buy, $140 target
Proprietary developer data showed a strong positive inflection point for Datadog, which gives the firm confidence in the trajectory of demand, the analyst tells investors. Overall, the firm has greater confidence in Datadog’s platform adoption play as feedback from checks suggest that Datadog is gaining more traction, specifically with its SIEM product.
tweet
$DDOG
DA Davidson Upgrades Datadog to Buy, $140 target
Proprietary developer data showed a strong positive inflection point for Datadog, which gives the firm confidence in the trajectory of demand, the analyst tells investors. Overall, the firm has greater confidence in Datadog’s platform adoption play as feedback from checks suggest that Datadog is gaining more traction, specifically with its SIEM product.
tweet
AkhenOsiris
RT @RadnorCapital: Thought I'd share a few comments on OSB / iGaming from Ryan Sigdahl at Craig Hallum. Ryan is a class act and has been a voice of reason in the space.
"Given the importance of the NFL and only four weekends in Q3, we highlight a few important trends per our checks:
Betting volumes have been strong – lots of new users and existing users spending more.
Win rates slightly higher than expected.
New sign-up promotional offers are relatively stable.
We remain bullish on the sector given a macro resilient industry, secular growth tailwinds and business model operating leverage. We think most operators and suppliers are trending towards a beat in Q3 and think industry, business and stock momentum will continue."
Ryan also looks at app installs, which have been supportive of greater volume, increasing y/y with Draft Kings and FanDuel evenly split for download share lead. The rest of the pack remains in a tough fight to gain customers. Duopoly intact. $DKNG $FLUT $GAMB $GAN $GENI $INSE $LNW $PENN $RSI $SRAD
"Draft Kings $DKNG reported and the stock is down ~8%. I continue to have conviction, and under normal market conditions (incredibly volatile day) this is not a -8% print. I've owned Draft Kings since it came public in 2020, and while its been a volatile ride, the trend has been higher. I took some risk off the table in 2021 and have been adding opportunistically since then. The ride continues to be volatile, but I expect the trend to continue higher as they execute on a massive online gaming opportunity in the US.
I see this as a clearing event for 2024, with the most material long term business risk being around the tax surcharge in the 4 states that have tax rates >20% and the potential impact on consumer behavior. This will be implemented in 2025 and I will discuss more below.
The headline “miss” is not something we are used to seeing and there were certainly negatives in the quarter (which were telegraphed by management), but these negatives are explainable, and I continue to have confidence in the business model and industry trends.
Draft Kings raised their 2024 revenue guide, which now implies growth >40%, but meaningfully cut their EBITDA guide by $120mm to $380mm ($500mm prior). There are several reasons for this. The IL tax hike accounting for ~$50mm. Jackpocket losses – they acquired Jackpocket earlier this year and they expect it to be profitable in 2025 – I see this as an important user acquisition tool. The Washington DC launch accounting for ~$30mm – upfront investments to win new markets. ~$12mm from unfavorable sport outcomes (bad luck, which typically evens out). And a ~$23mm hit from higher customer acquisition, given higher than expected user growth. DKNG grew paying users +50% (+34% ex Jackpocket) in Q2, which is a positive for the business long term. This is still a relatively immature legal industry and investing behind customer acquisition / retention makes sense to me. Important to note that customer acquisition costs on a per user basis are trending lower, which proves that the guidance reset is a function of higher user counts (and investing in those users). Also, the raised revenue guidance reflects their success acquiring users. ARPU was down because of the new Jackpocket customers. This makes sense.
Management expects the healthy user acquisition environment to continue through 2024 and they indicated that the US online gaming opportunit[...]
RT @RadnorCapital: Thought I'd share a few comments on OSB / iGaming from Ryan Sigdahl at Craig Hallum. Ryan is a class act and has been a voice of reason in the space.
"Given the importance of the NFL and only four weekends in Q3, we highlight a few important trends per our checks:
Betting volumes have been strong – lots of new users and existing users spending more.
Win rates slightly higher than expected.
New sign-up promotional offers are relatively stable.
We remain bullish on the sector given a macro resilient industry, secular growth tailwinds and business model operating leverage. We think most operators and suppliers are trending towards a beat in Q3 and think industry, business and stock momentum will continue."
Ryan also looks at app installs, which have been supportive of greater volume, increasing y/y with Draft Kings and FanDuel evenly split for download share lead. The rest of the pack remains in a tough fight to gain customers. Duopoly intact. $DKNG $FLUT $GAMB $GAN $GENI $INSE $LNW $PENN $RSI $SRAD
"Draft Kings $DKNG reported and the stock is down ~8%. I continue to have conviction, and under normal market conditions (incredibly volatile day) this is not a -8% print. I've owned Draft Kings since it came public in 2020, and while its been a volatile ride, the trend has been higher. I took some risk off the table in 2021 and have been adding opportunistically since then. The ride continues to be volatile, but I expect the trend to continue higher as they execute on a massive online gaming opportunity in the US.
I see this as a clearing event for 2024, with the most material long term business risk being around the tax surcharge in the 4 states that have tax rates >20% and the potential impact on consumer behavior. This will be implemented in 2025 and I will discuss more below.
The headline “miss” is not something we are used to seeing and there were certainly negatives in the quarter (which were telegraphed by management), but these negatives are explainable, and I continue to have confidence in the business model and industry trends.
Draft Kings raised their 2024 revenue guide, which now implies growth >40%, but meaningfully cut their EBITDA guide by $120mm to $380mm ($500mm prior). There are several reasons for this. The IL tax hike accounting for ~$50mm. Jackpocket losses – they acquired Jackpocket earlier this year and they expect it to be profitable in 2025 – I see this as an important user acquisition tool. The Washington DC launch accounting for ~$30mm – upfront investments to win new markets. ~$12mm from unfavorable sport outcomes (bad luck, which typically evens out). And a ~$23mm hit from higher customer acquisition, given higher than expected user growth. DKNG grew paying users +50% (+34% ex Jackpocket) in Q2, which is a positive for the business long term. This is still a relatively immature legal industry and investing behind customer acquisition / retention makes sense to me. Important to note that customer acquisition costs on a per user basis are trending lower, which proves that the guidance reset is a function of higher user counts (and investing in those users). Also, the raised revenue guidance reflects their success acquiring users. ARPU was down because of the new Jackpocket customers. This makes sense.
Management expects the healthy user acquisition environment to continue through 2024 and they indicated that the US online gaming opportunit[...]
Offshore
AkhenOsiris RT @RadnorCapital: Thought I'd share a few comments on OSB / iGaming from Ryan Sigdahl at Craig Hallum. Ryan is a class act and has been a voice of reason in the space. "Given the importance of the NFL and only four weekends in Q3, we highlight…
y could be even larger than they previously thought (industry data supports this claim). They are also not seeing any signs of weakness in the consumer with strong cohort behavior across the board – hard to tell how much is unique to their industry, given the broader consumer slowdown.
Importantly, the 2025 EBITDA (which is a close proxy to FCF for this business) guide was maintained at $900mm - $1bn, which can be viewed as a de facto raise, given management is now including the impact of the IL tax hike, without including potential upside from the tax surcharge.
As I mentioned, DKNG is implementing a gaming tax surcharge in high tax states (IL, NY, PA, VT where tax rates >20% of GGR), which is not embedded in 2025 guidance. I estimate the EBITDA benefit could be $200-300mm, but a lot depends on whether GGR holds. The questions here are whether others (primarily Fan Duel $FLUT) will follow and whether consumers will care. DKNG defending their margins with a low single digit % surcharge seems like a prudent move – customers obviously don’t like incremental charges, but DKNG has established brand loyalty, and while 5% is meaningful to DKNG, its less meaningful to customers, considering low average bet size. Also, betting is far more of a leisure activity than a way to make money (for most), which makes the 5% easier to digest. Tax surcharges are not uncommon in gaming and other industries – for example, hotels and taxis have taxes that get passed onto the consumer.
I don’t expect any further tax hikes in the near term (NJ is clear) and continue to believe IL was a perfect storm of a democrat governor / congress and massive budget deficits. It’s also important to note that IL is the home of Rush Street Interactive $RSI, which could explain the progressive nature of the tax, which protects smaller players. Importantly, the illicit market continues to be rampant, which is something the regulators need to consider when evaluating further tax hikes. Illegal sportsbooks obviously don’t pay taxes, which allows them to reinvest more in an increasingly attractive product.
Management also announced a plan to buyback $1bn worth of stock, which accounts for 6-7% of the current market cap.
Over the last few years, my estimates have been well above guidance, given managements history of conservatism. After this print and expectations reset, they need to reestablish credibility and momentum – I think it’s safe to assume they can do ~$1bn in FCF in 2025, which implies the stock is now trading ~16x FCF. I see this as very reasonable for a company compounding growth well >20% (with plenty of new state opportunities ahead in OSB and iGaming) and inflecting to meaningful profitability. "- Radnor Capital
tweet
Importantly, the 2025 EBITDA (which is a close proxy to FCF for this business) guide was maintained at $900mm - $1bn, which can be viewed as a de facto raise, given management is now including the impact of the IL tax hike, without including potential upside from the tax surcharge.
As I mentioned, DKNG is implementing a gaming tax surcharge in high tax states (IL, NY, PA, VT where tax rates >20% of GGR), which is not embedded in 2025 guidance. I estimate the EBITDA benefit could be $200-300mm, but a lot depends on whether GGR holds. The questions here are whether others (primarily Fan Duel $FLUT) will follow and whether consumers will care. DKNG defending their margins with a low single digit % surcharge seems like a prudent move – customers obviously don’t like incremental charges, but DKNG has established brand loyalty, and while 5% is meaningful to DKNG, its less meaningful to customers, considering low average bet size. Also, betting is far more of a leisure activity than a way to make money (for most), which makes the 5% easier to digest. Tax surcharges are not uncommon in gaming and other industries – for example, hotels and taxis have taxes that get passed onto the consumer.
I don’t expect any further tax hikes in the near term (NJ is clear) and continue to believe IL was a perfect storm of a democrat governor / congress and massive budget deficits. It’s also important to note that IL is the home of Rush Street Interactive $RSI, which could explain the progressive nature of the tax, which protects smaller players. Importantly, the illicit market continues to be rampant, which is something the regulators need to consider when evaluating further tax hikes. Illegal sportsbooks obviously don’t pay taxes, which allows them to reinvest more in an increasingly attractive product.
Management also announced a plan to buyback $1bn worth of stock, which accounts for 6-7% of the current market cap.
Over the last few years, my estimates have been well above guidance, given managements history of conservatism. After this print and expectations reset, they need to reestablish credibility and momentum – I think it’s safe to assume they can do ~$1bn in FCF in 2025, which implies the stock is now trading ~16x FCF. I see this as very reasonable for a company compounding growth well >20% (with plenty of new state opportunities ahead in OSB and iGaming) and inflecting to meaningful profitability. "- Radnor Capital
tweet
Offshore
Photo
Stock Analysis Compilation
Perritt Capital on Natural Gas Services Group $NGS US
Thesis: NGS provides essential oil and gas compression equipment, offering steady cash flow from long-term contracts in a booming U.S. oil market where equipment scarcity creates high demand
(Extract from their Q2 letter) https://t.co/1wLMdNil4c
tweet
Perritt Capital on Natural Gas Services Group $NGS US
Thesis: NGS provides essential oil and gas compression equipment, offering steady cash flow from long-term contracts in a booming U.S. oil market where equipment scarcity creates high demand
(Extract from their Q2 letter) https://t.co/1wLMdNil4c
tweet
Offshore
Photo
Librarian Capital
VP Harris: "One of my guilty pleasures ... are my Dorritos"
Bill Ackman: "Kamala Harris is promoting Dorritos consumption to voters" https://t.co/XaU3ViHOwt
tweet
VP Harris: "One of my guilty pleasures ... are my Dorritos"
Bill Ackman: "Kamala Harris is promoting Dorritos consumption to voters" https://t.co/XaU3ViHOwt
tweet
Offshore
Photo
Alex Bilzerian
RT @alexbilz: 'Negative Probabilities in Financial Modeling' - Mark Burgin & Gunter Meissner:
https://t.co/sph43bZGnO
Published in Wilmott Magazine in 2012. https://t.co/iUQn7whtRr
tweet
RT @alexbilz: 'Negative Probabilities in Financial Modeling' - Mark Burgin & Gunter Meissner:
https://t.co/sph43bZGnO
Published in Wilmott Magazine in 2012. https://t.co/iUQn7whtRr
tweet