Categories
ramblings

WeChat Bonus Ban

The additional ban of WeChat is the more interesting portion of the order. WeChat is not as popular as Tik Tok on App Stores or even among internet users in United States generally. It’s ban looks like opening move more than endgame.

The Commerce Department order will “de-platform” the two apps in the U.S. and bar Apple Inc’s app store, Alphabet Inc’s Google Play and others from offering the apps on any platform “that can be reached from within the United States,” a senior Commerce official told Reuters.

The order will not ban U.S. companies from doing business on WeChat outside the United States, which will be welcome news to U.S. firms like Walmart and Starbucks that use WeChat’s embedded “mini-app” programs to facilitate transactions and engage consumers in China, officials said.

The order will not bar transactions with WeChat-owner Tencent Holdings’ other businesses, including its online gaming operations, and will not prohibit Apple, Google or others from offering TikTok or WeChat apps anywhere outside the United
States.

Source: CBC

Categories
ramblings stock based compensation

Stock Based Compensation = Expense to Maintain Mercenaries

It is good to make our view on this topic clear to readers. Title is the TL;DR but if you want to know more why we think so … read on. Every young business in its early days needs mercenaries¬† who are specialized to operate in that context. If you and band of co-founders did a good job on validating the product market fit then as your business grows, then you should have lesser need of those hired guns matter how talented or experienced they are. Sure you need some of them but majority of your team ought to be just executing on the vision (or mission) of the company.

So, if a business is a publicly listed corporation with billions of dollars in revenue and they still depend on mercenaries then it qualifies as a special situation. It is only worthy of inclusion as a special situation in Rad Universe if it produces more free cash flow or at the very least more EBITDA than expenditure for Stock Based Compensation on Quarter over Quarter basis for latest quarter. If it doesn’t, it is uncertain whether the company ever wants to be great profitable franchise at any point in future. We haven’t yet filtered out many such stocks from Rad Universe. Over next couple of weeks you will see most of these removed and if fortunate replaced by stocks that at least show an aspiration to be a great business in future.

Here are some of the first stocks we have removed from Rad Universe due to our new qualification for companies with high expenditure on stock based compensation (as always – until situations change):

  • Everbridge – EVBG
  • Five9 – FIVN
  • The Trade Desk – TTD
  • Zoom Video Communications – ZM
  • Survey Monkey – SVMK

This is just the first set, there will be more. Hopefully, these companies qualify as special situation soon because some of them sure seem like great potential profitable franchises as user of their product (especially Zoom).


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