Surinder Capital

@Crussian17 @OnodaCapital Adding ~$500M of net new YoY. If they keep that number close next year this is ~$2B, 30% FCF, growing 33%, trading at ~4x. If you don’t want to own any of this go ahead and say so but starting to feel like the guys who couldn’t own COST or TGT or ROST 10yrs ago. Plain wrong.

@OnodaCapital It’s expensive, if it was down to CRM wday or team multiples it would be

Fact that FIG isn't up like 50% on these numbers shows how bad sentiment is

@DarkoStateNews @biasedmsufan @OdellBretthamJr Now do UMs 16% acceptance rate. Accepting a much smaller % from an even more qualified applicant pool is a clear indication of academic selectivity. Michigan is the #20 university in the country and MSU is #64 (US News). This isn’t a complicated situation.

@biasedmsufan @OdellBretthamJr Good for you! Many intelligent and high-achieving Spartans. But even if you weren’t so brilliant, the point would be the same. They legitimately believe the data means 84% of sentient beings (including them) would be admitted. It’s just objective ignorance.

The acceptance rate argument is lazy. MSU's average admit has a 3.74 GPA. More than half (54%) are above a 3.75. Which means the average MSU admit had better than an A- average across four years of high school. The 84% acceptance rate doesn’t mean 84% of people would get in. It’s 84% of an already-qualified pool. People without the grades don't bother applying because they know they won't get in. So when people (the 〽️s) who couldn't sniff a 3.74 themselves point to MSU's acceptance rate as proof it's "easy," they're actually proving they don't understand basic math. They wouldn't have been in the 84%, because they weren’t good enough to be in the applicant pool at all.

@LaneB7777 @MarcoFoster_ You are aware of the … actual inspections that occurred… 20 of them by the International Atomic Energy Agency? No? Or the uranium that they actually shipped to Russia? All this was undone when Trump pulled out in 2017. And now… here we are. #winning

This snake can lie all he wants, Iran got billions from him and wouldn't let anyone in to check on their nuke program. Iran knew Obama was a weak president and they took advantage of that. I just had to laugh when this lying snake said, "we got 97% of their enriched uranium out", NO they did NOT!

President Obama on Iran: “We pulled it off without firing a missile. We got 97% of their enriched uranium out. There’s no dispute that it worked and we didn’t have to kill a whole bunch of people or shut down the Strait of Hormuz”

@P_Remarks @sinstockpapi Realizing now this just a list of shorts.

@Rebrand_As_Y @longshortlalo @sinstockpapi I’ll just leave this here: $SHAK >100x P/E $WING >100x P/E $CMG >50x P/E

@MaxWeisenstein @DarkoStateNews I hear this retort often. Always some obscure program like Bovine Science. UM Engin is top 5 nationally. Glad you made the right choice but “no one at MSU even applied” is absurd. 80% of those who apply to UM don’t get in, and many land at MSU as the next best in-State school.

@SurinderCap1tal @DarkoStateNews Sure go ahead, but we really dont feel inferior. Try to study packaging engineering or Veterinary science at UM. Nobody I know that went to MSU applied to UM for various reasons. I also got an offer for UM grad school out of MSU. Picked Wayne instead. Good choice.

It’s not weird. You’re the only fan base that belittles the quality of your rival’s education without actually attending the school. If I claimed Harvard and mocked Michigan alums for their inferior academics, I’m guessing they’d bring up the fact I didn’t attend Harvard.

@Droppingballss @stateofMIman @DarkoStateNews Specifically referring to this part: “You’re the only fan base that belittles the quality of your rival’s education without actually attending the school.” Doesn’t seem ambiguous that “without attending the school” is the qualifier.

@stateofMIman @SurinderCap1tal @DarkoStateNews $60K a year and still needs this explained. 😂

@Cenobiteisright @DarkoStateNews Yup. Happy to pick a number on any bet you’d like. Pretty flattering you think so highly of the school’s academics that I would lie about it. Michigan BBA (Ross) ‘08. Even one of the fancy programs!

@SurinderCap1tal @DarkoStateNews

@P_Remarks I literally laughed out loud reading that one. Of course if you can’t grow more than 20% you’re doomed to a single digit FCF multiple.

@GlockMaster6 @Lederacher @KobeissiLetter @grok It’ll unlock about 10x that amount in frozen funds. So you’re correct about that part.

BREAKING: The US and Iran are nearing a 14-point "memorandum of understanding" to end the Iran War and set a framework for more detailed nuclear deal. The deal would include: 1. Iran committing to a moratorium on uranium enrichment 2. The US lifting its sanctions and releasing billions in frozen Iranian funds 3. Both sides lifting restrictions around transit through the Strait of Hormuz. 4. A 12-15 year duration on Iran's moratorium on uranium enrichment 5. An end to the war and the beginning of a 30-day negotiation period We expect more details on the deal shortly.

@John_Hempton You’re short software that is basically being long semis.

How is it even possible that on a melt up day like this a short seller (me) can be having a ridiculously, blindingly good day? Something must be wrong.

@JaredSleeper At some point the telecom hooks, integration know-how, and sticky customer book likely worth a lot to someone who has great AI tech but lacks the distribution and hard won experience building & integrating the full voice CX stack. FIVN much more valuable to a buyer than alone.

Every day for a next long while, I'm going to tear down a new software co and highlight the AI risks/opportunities around it- products launched, top startups, key earnings call quotes, etc. Day thirty-one: Five9 $FIVN, which has the lowest EV/sales in the entire SW universe (!!) Peak share price: $201.68 (Aug 6, 2021) Share price today: $16.55 (-92%) EV today: $1.37bn ARR today: $1.2bn (+8%) NRR: 105% EV/ARR: 1.1x GAAP Operating Margin: 7% EV/Run-rate GAAP EBIT: 17x Headcount: 2,910 (-5% Y/y) What Five9 does: Five9 is a cloud contact center (CCaaS) platform- the software that powers the phone calls, chats, emails, and social messages between companies and their customers when someone calls for support, makes a purchase, or needs help. The platform handles inbound and outbound voice, digital channels (chat, email, SMS, social), workforce management (scheduling and forecasting agent staffing), quality management (call recording, scoring, coaching), and analytics/reporting. Five9 sits between the telephony infrastructure (carriers, SIP trunking) and the business applications (CRM, helpdesk, order management), routing each customer interaction to the right agent with the right context. AI bear case: This one is pretty clear/easy. It's not hard to imagine AI wiping out a majority of the contact jobs that Five9 relies on for its revenue. AI bull case: This is- tougher. The bull case for Five9 is that there will be a hybrid world where humans remain a critical part of phone-based customer support, and that that data is critical context which is required for AI powered customer support interactions, giving Five9 a right-to-win for those interactions. If AI for CX commoditizes quickly (which may happen) there's a case for Five9 to capture some it. In that case, continued mix-shift from on-prem to cloud + AI cross-sell might be enough to offset the seemingly certain decline in CX headcount. AI traction: "I'm also excited to report that our enterprise AI annual run rate revenue surpassed $100 million in the fourth quarter." Adjacent AI-native startup summary: There are a slew of AI-native startups helping to automate CX use cases. Among the most prominent: @sierraplatform - Reported 150m$ ARR to end CY25 @DecagonAI - "significantly north" of 30m$ ARR as of November @parloa_ai - 50m$ ARR as of December @intercom - Fin reportedly approaching 100m$ ARR Management Quotes: "Subscription revenue, which now makes up 82% of total, accelerated to 12% year-over-year growth in Q4." "This was driven by enterprise AI revenue growth accelerating from 41% to 50% year-over-year and core CCaaS subscription revenue growth accelerating from 7% to 8% year-over-year." "Additionally, our concurrent seat count continued to grow at a healthy rate, both quarter-over-quarter and year-over-year, relatively in line with our core CCaaS revenue growth." "And obviously, we're 40% cloud today, 60% [of contact center seats] still are on-prem, and it's going to be a multiyear opportunity for us to continue that trend. But look, things have changed." "So our $100 million of enterprise AI revenue is all consumption or capacity based. So the way it works is that we charge for a block of committed units, whether that's minutes or gigabytes or whatever it may be. And then anything above that would be overage. So it is absolutely consumption-based and yes, and gaining a lot of traction there." "So if you look at the composition of our AI revenue, the two biggest ones are our AI Agents as well as Agent Assist. And then followed by Workflow Automation and a lot of other smaller products that are growing very fast, but still very small in nature. So -- and AI Agents, of course, we're gaining significant traction in terms of the gen AI base as well as Agent Assist that's using gen AI as well. So we haven't given the exact mix. But of course, there's really strong momentum and acceleration that's happening across the board." Commentary: Five9's results, multiple and associated fears perfectly captures one dimension of the AI bear-case: seat count reduction. Five9's solution- which requires 9.9999% (five nines!) of uptime to service customers given its revenue-proximity and mission criticality, would be quite challenging to vibecode- it is the epitome of infrastructure. That said, AI for CX is a killer use case and the argument for contact center seats to decline feels ironclad at this point- even if it hasn't moved beyond anecdotes into economy-wide data just yet. The struggle for Five9 is that this is simply impossible to disprove, even if the core business actually accelerated (and it did!) in Q4- and it is truly hard to imagine that the company ends up on the cutting edge of AI. The best hope is probably for AI for CX to brutally commoditize, leaving integration with whatever part of CX remains stubbornly human as a key value proposition/source of moat. To me, this serves as a reminder of the importance of watching "canary" careers like contact center workers, translators, etc. to continue gleaning insights on the progress AI is making in the field at disrupting full-fledged labor.

@ReesePolitics He’s going to issue more stock ATM: not that hard actually, but probably doesn’t want to say it out loud and issue at $20 instead of $25.

Here's the most contentious part of Ryan Cohen's CNBC Squawk Box interview about the GameStop-EBAY acquisition. This is a HEATED back and forth, uncommon for financial news. $GME Sorkin, at one point is in disbelief at RC's repetitive answering to his question.

@katyperry (Waiting for anyone to look up the age of consent in Canada)

also heard Justin Biebers gonna b here 2night, can't wait to tap that.

@ChairliftCap I was skeptical 3 months ago, neutral 6 weeks ago, but the data is just relentlessly positive NTM (capex going up, capacity booked thru ‘27, older GPU pricing going UP, NVDA/AVGO demand relentless). Harder to not believe. net exposure lower than months but debating ripping it

Can't remember another time when every single market participant was so confidently and aggressively in the same trade

@Thomus0x @marketplunger1 How do you think people valued AMZN and NFLX when they were losing money? Those of course, turned out horribly. Sales multiples express an expectation of future margins. It’s not hard.

@marketplunger1 Why do software stocks still get valued on sales mult? I’ll never understand anyone valuing any stock ever on a sales mult

I get that software and SaaS are getting murdered and they'll never recover and they're all zeroes. So why in the hell is my favorite (and prob only SaaS) name still trading at 5x NTM Sales? Where is this washout I'm hearing about.

@TechFundies Although admittedly this isn’t really an investing style but I would bucket into narrative regime investors — most similar in DNA to earnings revision guys but different trade.

@TechFundies There’s also shorting on narrative shifts — even when numbers aren’t coming down, you may have deceleration + a boogey = severe multiple compression. Prime example is $IGV. These companies aren’t missing the beats are just less inspiring and AI narrative it too hard to ignore.

I think there are basically 2 prevailing strategies in the market. 1) Earnings revisions Only two questions matter near-term: Is the story getting better or worse, and are numbers going up or down? That's it. For momentum names, in either direction, that's all that matters -> is the story continuing to improve w/ beat and raises, or is the story continuing to erode with misses / guidance reductions. There is more complexity at extremes (ie second derivatives) that also works -> the story has stopped getting worse and numbers are no longer going down so upside optionality, or narrative no longer improving and downside risk to numbers so downside optionality. Earnings revisions work because they are reflexive. The company is doing well, estimates are moving higher and the stock is rising. More investors do work on the name and the due diligence will be positively biased as they generally ask more favorable questions to understand the strengths of the company. This leads to more buying and the increased stock price reinforces the bullish narrative. Hopefully, management is smart enough to set forward guidance at beatable levels and the step-ups continue. Same is true for reflexivity on the downside. A company is struggling and missing its own guidance and expectations. The stock moves lower as obviously more people sell than buy. Investors do more work but are naturally more focused on the reasons for corporate underperformance and corresponding risks. Further stock price declines fuel the negative narrative which feeds on itself. Companies often don't take their medicine as far as fully disclosing bad news and the negative revisions continue. So again, the playbook for this is simply 1) is the story getting better or worse?, and 2) are numbers going up or down? 2) Valuation From time to time, stocks get too cheap or expensive relative to fundamentals such that the disconnect is very interesting (let's say can make at least 50% to get back to conservative valuation target in either direction within 12-18 months). Very often, large disconnects occur when earnings revisions are unclear to everyone (stock is really cheap but no one has any clue when numbers stabilize, stock is really expensive but everyone thinks company will continue beating / raising). However, the insight here is that valuation is interesting in and of itself for the right kinds of companies (solid business, transitory issues, acquisition candidates, etc.). And that no one has visibility into near-term numbers is already in the stock and why the valuation is so compelling. This opportunity also always arises in tough macro periods where everyone is frozen bc who can predict how the great financial crisis or covid pandemic plays out - so that uncertainty is shared by everyone and more than represented in stock valuations. And that is why the opportunity exists - because everyone is worried about the same imponderable thing and it's already in the stock price. The only advantage you need here is a deep understanding of and conviction in the business, and freedom / willingness to buy it for the long-term (and the returns never take as along as you think). Reality My experience is most investors typically only pursue one of above strategies (and might only be allowed to pursue one or the other). So they won't / can't buy $WDAY at 20x FCF bc they think guidance might be lowered (company misexecution, tough macro, etc.), or they won't sell $WDAY at 35x FCF bc they are confident everything is great and company will continue beating. I also have found earnings revisions investors tend to have nearer-term horizons and be less valuation sensitive. This is because it's hard to fill a portfolio with names that will both beat earnings and trade at reasonable valuations. So, on balance, these investors will compromise on valuation. Valuation investors have longer-term horizons and are by definition valuation sensitive and less sensitive to revisions. This is because it's hard to fill a portfolio with names that are both cheap and that will beat earnings. So, on balance, these investors will compromise on earnings visibility. Optimal I have found earnings revisions offer the most explanatory power near- to mid-term. I want to be long stocks where numbers are moving higher and short stocks where revisions will be lower. But I also want think it is an advantage to be able to cast that strategy aside and buy companies at valuation extremes. This is when a good company is "too cheap" even if I'm not sure of near-term revisions. There are other criteria that need to be in place for this to work -> solid business w/ reasonable estimation capabilities, potential negative revisions are manageable and likely in the stock, less risk of permanent impairment over a 12-18 month horizon, balance sheet in order and not indebted, etc. Finally, the intersection of the two is where you can nail inflection points in businesses / stocks. A company is too cheap and is about to start beating numbers which will drive both estimates and the multiple higher. That's where the big money resides. Anyway, this overall thinking is why I structure my notes as follows: Is this a bad, good, or great business? Is the story getting better or worse? Are numbers going up or down? What is the risk / reward?

@BarackObama @CoachDustyMay @umichbball Go Blue!

Congratulations to @CoachDustyMay, Elliot Cadeau, and @UMichBBall on winning their first title since 1989! This team dominated the tournament from start to finish. Well deserved. Go Blue!

@ryancbriggs Interchange fees are legislatively set. Credit card companies (eg, Amex which doesn’t have revolving credit) make money on your spend. They give you back about 40-50% of what they make everytime you swipe, cause 50% of something is better than 100% of nothing.

It still feels completely insane that my credit card company pays me in order to float me a loan for a month