At Strata+Hadoop last week Cloudera said they are continuing to sign up 100% y/y customers and growth remains steady. Surprising that their valuation got cut so much...
About that Dropbox markdown, I'm not sure if that's news, GSV capital has been marking down their dropbox position for months now. According to their SEC filings (ticker GSVC), these are the estimated share prices for Dropbox common stock over the past year.
June 30, 2015 - $22.88 per common share
September 30, 2015 - $19.06 per common share
December 31, 2015 - $16.94 per common share
Q1 2016 data not released yet
That's a 25% markdown over the last six months of 2015. Seeing how many other tech stocks have fallen a lot lately (LinkedIn, Yelp, Twitter, GoPro), another Dropbox markdown isn't that surprising.
Winter has come. It's sad to see companies that are providing real, important products getting hammered for not meeting potentially impossible expectations.
People have been talking about Dropbox struggling to meet its valuation for a while now. I'm a little more surprised at the Cloudera markdown, they seem to be a pretty important company in a sector that only keeps growing. Any insights as to why Cloudera was marked down?
> It's sad to see companies that are providing real, important products getting hammered for not meeting potentially impossible expectations
They signed on to those expectations when they took those sky high valuation investments. Thats not going to make the employees feel all that much better, of course
I see the markdown more as a reflection that customers, at large, actually aren't getting value from these companies, or at least less value than previously assumed. I know it's only anecdotal, but with e.g. Dropbox, I don't know a single person who pays for Dropbox, and every Dropbox user I know claims they would be content to migrate to some other free service or just buy external hard drives and deal with lesser accessibility before they would pay on a subscription basis for arbitrary cloud storage.
So then the question is about enterprise clients, and it seems the value proposition for enterprise cloud data management is just good enough. Many other enterprise cloud services provide the same thing as merely a tiny add on to a whole suite of other cloud tools and services. I even remember in a past job once I asked if my team could have a tiny budget (on the order of like $100/yr for our team size) to have a private work-related Dropbox set up. Various managers got involved and shut it down right away, claiming that the $100/yr was just not something they could approve, even though we probably paid at least 5x to 10x that per person for various other cloud services. They basically said, make due with this other legacy enterprise thing that has some crappy Dropbox clone buried somewhere inside it.
More surprising than Dropbox being marked down is that it was ever valued at those levels in the first place, IMO.
> I'm a little more surprised at the Cloudera markdown, they seem to be a pretty important company in a sector that only keeps growing. Any insights as to why Cloudera was marked down?
More generally than Cloudera: this can be a reasonable thing to happen to an important company in a sector that only keeps growing. Examples:
- someone got a little excited, or got in a bidding war, so paid an amount that upon post-deal reflection seems high. Yes, this is #1 bubble behavior, but it can just happen (in a slightly less extreme fashion) on public stocks as well.
- A company can be perfectly good but its customer base may be sagging for other reasons. So the assumptions that applied last time the stock was purchased may now be invalid... until the company finds a new group of customers to sell to or external conditions otherwise change.
- Investor A puts money in under certain assumptions. Investor B comes in in a later round at a higher valuation because Investor B likes the widget market and thinks it will grow at 20% p.a. over the next few years. Investor A still likes the company but doesn't think the widget market is as strong yet...but the price has now been set by Investor B. So Investor A legitimately marks it down even though Investor B legitimately doesn't.
Note that all this is crazy anyway -- VCs typically don't mark their investments down anyway since it's all hypothetical until there's a liquidity event or shutdown. These are large private equity entities who have to report for other reasons and have their own reasons for assigning valuation (see my last point above).
I'm enjoying fidelity's releases as a public company they have to release financial information. Gives as close a proxy as one can get to the health of these "Unicorns" remember that term?
I wish fidelity or some other financial company would've taken a stake in the front runners of this cycle, Airbnb and Uber.
On that note does Google Ventures doesn't have to give updates on how their investments are doing as alphabet or is that just lost in the noise.
I think it has more to do with mutual fund regulations than public company regulations. I'm not sure how much Google has to disclose about its internals but I think it has a lot of discretion.
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[ 14.6 ms ] story [ 901 ms ] threadalso slashed the estimated worth of cloud-storage company Dropbox by almost 20 percent.
Ouch
June 30, 2015 - $22.88 per common share
September 30, 2015 - $19.06 per common share
December 31, 2015 - $16.94 per common share
Q1 2016 data not released yet
That's a 25% markdown over the last six months of 2015. Seeing how many other tech stocks have fallen a lot lately (LinkedIn, Yelp, Twitter, GoPro), another Dropbox markdown isn't that surprising.
The ones you mentioned largely lose money or have drastically cut forecasts.
People have been talking about Dropbox struggling to meet its valuation for a while now. I'm a little more surprised at the Cloudera markdown, they seem to be a pretty important company in a sector that only keeps growing. Any insights as to why Cloudera was marked down?
They signed on to those expectations when they took those sky high valuation investments. Thats not going to make the employees feel all that much better, of course
So then the question is about enterprise clients, and it seems the value proposition for enterprise cloud data management is just good enough. Many other enterprise cloud services provide the same thing as merely a tiny add on to a whole suite of other cloud tools and services. I even remember in a past job once I asked if my team could have a tiny budget (on the order of like $100/yr for our team size) to have a private work-related Dropbox set up. Various managers got involved and shut it down right away, claiming that the $100/yr was just not something they could approve, even though we probably paid at least 5x to 10x that per person for various other cloud services. They basically said, make due with this other legacy enterprise thing that has some crappy Dropbox clone buried somewhere inside it.
More surprising than Dropbox being marked down is that it was ever valued at those levels in the first place, IMO.
More generally than Cloudera: this can be a reasonable thing to happen to an important company in a sector that only keeps growing. Examples:
- someone got a little excited, or got in a bidding war, so paid an amount that upon post-deal reflection seems high. Yes, this is #1 bubble behavior, but it can just happen (in a slightly less extreme fashion) on public stocks as well.
- A company can be perfectly good but its customer base may be sagging for other reasons. So the assumptions that applied last time the stock was purchased may now be invalid... until the company finds a new group of customers to sell to or external conditions otherwise change.
- Investor A puts money in under certain assumptions. Investor B comes in in a later round at a higher valuation because Investor B likes the widget market and thinks it will grow at 20% p.a. over the next few years. Investor A still likes the company but doesn't think the widget market is as strong yet...but the price has now been set by Investor B. So Investor A legitimately marks it down even though Investor B legitimately doesn't.
Note that all this is crazy anyway -- VCs typically don't mark their investments down anyway since it's all hypothetical until there's a liquidity event or shutdown. These are large private equity entities who have to report for other reasons and have their own reasons for assigning valuation (see my last point above).
I wish fidelity or some other financial company would've taken a stake in the front runners of this cycle, Airbnb and Uber.
On that note does Google Ventures doesn't have to give updates on how their investments are doing as alphabet or is that just lost in the noise.