Hosts: Jason Calacanis & Molly Wood
Category: 📈 Market
Podcast’s Essential Bites:
[29:00] JC: “We have a crash in growth stocks, […] [which] are […] these mid cap, call it $1 to $10 billion companies typically, […] the ones with billions in revenue, not the […] Teslas, not the Googles, not the Apples. We're talking about the mid market companies whether it's Zoom, Peloton, Coinbase, Robinhood, excetera.”
[29:57] JC: “I would say most of these are artificially high, because there was this moment at the top of the peak, where things went up like […] 20% of these 80% drops. That was completely ridiculous and lived for like a week or two. […] I remember seeing that with the Robinhood stock. […] If you took out, whatever the peak of these stocks were, […] I bet you these would be very muted, because there was a little bit of a mania that happened.”
[31:21] JC: “I think the proper valuation of a company like [Robinhood] would be $30 billion, it's at $10 billion right now. […] The price to sales ratio on the current market cap for 2021 revenue is 5x. I could see that being 10 or 15. But they did have this peak when everybody was trading like crazy during the pandemic. So there's some pandemic stocks here. I think Shopify falls into that as well, where people were doing a lot of ecommerce, because they were stuck at home and they couldn't go to stores. So I look at a company like Robinhood, like I look at Airbnb. You have that weird pandemic behavior, and kind of got to draw the straight line as opposed to the spike. But I still think it's a great company. I haven't sold my shares. And I'm going to hold for 10 years as my current plan. […] I like to think in decades. And I think a decade from now, they will have 5-10 times as many users. I could see them having 50 to 100 million users. And I can see those people having a lot of money in their accounts as they grow. So that's definitely going to be one of my top [two growth stocks to pick].”
[33:44] MW: “Zoom [is] down 70% from its 52 week high, which I think we can all agree was inflated in the sense that everybody was like, oh crap, there's only one company in the world right now. […] Its stock price, though, is still at $128 a share, market cap $38 billion, last 12 months revenue was 3.9 billion, up two times over the prior 12 months. […] Big […] customers are growing for Zoom, but its growth with smaller customers has stalled. They don't want to pay for it.”
[34:17] “I think Zoom will become a platform. […] They have the app store now. And there's a lot of people doing […] online conference software, [like] Hoppin. […] I think a lot of those businesses are going to be challenged by Zoom wanting to be in that business a bit. And Zoom will keep adding features. So I could see Zoom becoming in a way like AWS where Zoom is your video conferencing layer on your computer, and everything is kind of built on top of that, in a way like Slack is.”
[37:25] MW: “Square […] [is at] $94 a share, down 67% from its 52 week high of $289 a share. Market cap [is] $54 billion, revenue is double the prior 12 months. Potential risk factors are that Square’s revenue from staking Bitcoin made up about 60% of its total revenue in the first nine months of 2021. So I think the biggest risk factor here is Square’s potential pivot into all crypto all the time.”
[40:29] MW: “Opendoor’s […] stock price [is at] $10 a share, down 65% from its 52 week high. Market cap is $6.5 billion dollars, revenue at $4.4 billion […], purchased 15,000 homes in Q3 that was up 79% over Q2 and launched five new markets in Q3 up to 44 markets total.”
[40:54] JC: “It's a brilliant business idea. We're not making new homes. I think in terms of how clever the idea is, this is going to be on the top of my list for […] good timing to be a market leader in something. Owning these homes, buying them and then making it really easy to sell them, it's a really good idea. And I'm just a fan of Keith Rabois and his operational ability. […] I guess we have to define if you had to bet the farm, are you going for preservation of capital or increase in capital?”
[41:50] MW: “Opendoor is super interesting, because that's such a wide open field. […] It just makes it super easy to sell, buy and finance your house. And it's disrupting this real estate market that involves huge percentages on each side of the transaction. That is an industry ripe for disruption for sure. But there are dependencies here, including the housing market.”
[42:27] JC: “[A] housing crash might arguably make their business better. They could buy up more homes [and] lease them […]. So even if the housing market crashed, maybe that would give them some opportunity. […] I think they should steal the Pacaso model. […] They take a house, they create eight shares. […] Let's say it's a $5 million house, […] you divide by eight, that's how many days you get. They charge you like maybe 10% more, that's how they make their profit on setting up the home. Then the eight people own the home and Opendoor manages it. […] What it does is it makes owning a second home accessible to the people who maybe aren't there yet. Or they have a more efficient use of the second home and it's better for the planet. […] This is something that Opendoor could do with homes, and then even put some of them into the Airbnb inventory.”
[45:49] JC: “Roku down 75%. They've gotten totally demolished. Market cap is $16 billion. 2021 revenue [was] $2.7 billion, which puts their price to sales at 6x. […] 60 million active accounts. […] I hate hardware businesses. I know they have their own ad network and I think people are very excited about that, because streaming is growing. But man, they're up against Samsung, Apple TV, other built in platforms. […] This seems like the worst possible business you could be in. […] You're up against a lot of headwinds here. I kind of wonder, does anybody really need this anymore? And how hard is it to build this functionality into a TV?”
[52:31] JC: “Peloton is down 80%. It's at a 9.5 market cap. […] It's only trading at 2.3x and they got this new superstar CEO. I think we both like that one a lot. ROBLOX is down 67% from a crazy high, they're down to $46 a share. […] They're kind of back to their IPO price. All that value has been knocked out. But they have a lot of revenue. [They have a] high market cap […] of 14x. […] 45 million daily active users is bonkers.”
[54:32] JC: “I feel like Robinhood has the most upside. I still believe in the company. I know the founders. I think they're brilliant marketing people. I think it'll be a $250 billion company 10 years from now. 25x I could see it going, at least 10x to $100 billion. So that's why I'm holding my shares. […] And the fact that they've got seven 18 million people, it's incredibly hard to get 17 million people to have active accounts with money in them in finance, those are much more valuable than a Netflix subscriber or a free Spotify user.”
[56:51] JC: “I think it's very easy to churn from Zoom to use Microsoft Teams. […] And I think they're gonna fix Hangouts at Google. And so I could see headwinds there. But I don't see any natural competitor for Twilio, except Amazon, but Twilio seems to be sharper and goes into a deeper software layer. So I'm going to go with my long term safety bet being Twilio. I don't think that that 2.8 billion in revenue is at risk in any way and I only see it going up. When you build that stuff into software, it's hard to rip out and replace. It's not impossible, but you would only rip out and replace it if there was a much better product, […] two, three times better. And you certainly wouldn't rip it out for cost unless there was something that was three, four or five times cheaper.”
Rating: 🚀🚀🚀
🎙️ Full Episode: Apple | Spotify | Google (Original Title: "Coinbase’s Mutable Messaging, Revitalizing Peloton & High-Growth Companies Poised for a Comeback")
🕰️ 1 hr 23 min | 🗓️ 02/23/2022
✅ Time saved: 1 hr 20 min
