The Razor’s Edge is an investing podcast that combines a prop trader’s viewpoint and deep-dive fundamental research to provide a unique take on the markets. The show is co-hosted by Akram’s Razor, a trader and investor with decades of experience and a track record of truly differentiated ideas and analysis, and by Daniel Shvartsman, an individual investor for the past decade who saw thousands of investing pitches and ideas and how they played out during his previous time at Seeking Alpha.
The duo start with a theme or idea from Akram’s investing, then break it down to understand what goes into the idea, what could go wrong, and what else investors and traders need to know. They also interview industry leaders, executives, and other investors to get a wider perspective. The show has thousands of listeners around the world.
Talking The Twitter Trade, Analyst Day, And The Big Picture
It's been a wild and, finally, fun ride for Twitter over the past 11 months. While everything feels like smooth sailing now for bulls, even as of our last episode on the stock post ex-President Trump ban in January, things weren't so clear. Despite that, the set-up was good enough for Akram's Razor to open an options trade into the earnings call (and for Daniel Shvartsman to open a small long position, which is a separate story).
We break down what happened with Twitter but also more of the mechanics of the options trade; why that trade, why Q4 and not Q3, whether to hold it into the call itself, and what's left for Analyst Day this week. All of this happens within the context of the broader macro environment and what growth investors might start extrapolating as we (fingers crossed!) round our way out of the full COVID environment this year. So we bring a dollop of that context into the discussion as well.
4:00 minute mark - How does event-driven trading of options fit into a broader portfolio strategy?
12:00 - Reviewing our record on Twitter and how/when Akram's views flipped over 2020 - the importance of narrative shifts, product adoption/development, having a variant view, and understanding the other side of the trade
22:30 - Twitter's setup going into the start of 2021
28:45 - Why not own the biggest growth stocks instead of a Twitter?
34:30 - Market participants' tendency to extrapolate in the short-term, and the misuse of 'compounding'
40:00 - Defining mania
48:00 - The strum and drang around Twitter at the beginning of 2021 and the March options trade
1:04:00 - The Q4 reaction and what's left for the analyst day
1:11:00 - Twitter's differentiation in the subscription space
1:22:00 - The importance of understanding the process
1:27:00 - Peak screen time
The Future Of Meetings: Online vs. In-Person vs. Hybrid, with Meetup CEO David Siegel
Amidst a year of web acceleration, changing habits, and questions about what legacy the pandemic will have on our day to day lives, it helps to go back to roots. One company that has both been through its share of web-usage cycles and has an interesting view on the state of the world is Meetup, and on today's episode we speak with their CEO, David Siegel.
The company, founded back in 2002, has seen a lot over the years, and saw several years worth of activity in the past 18 months - a divestiture from WeWork (which had bought the company a couple years prior), a pandemic that required reversing a fundamental business policy, and a pandemic that placed more urgency on the need to meet with others, even as it made it harder to do so. We speak with David about the past 12-18 months, the future of meetings, how much of our online meeting environment will stick around, what Clubhouse and the audio bubble might mean for meetings, and the importance and challenge of online moderation and community management.
3:00 minute mark - Background on Meetup’s model
9:00 - The COVID + WeWork period
12:00 - The WeWork relationship/divestiture
15:30 - Why WeWork/Meetup didn’t work
20:30 - What does it mean for Meetup to go all digital
24:00 - Meetup differentiation
27:30 – Modern web moderation and how to tackle that issue
31:00 - Talking through pandemic effect on meetings, and how do the new online tools and in-person integrate?
42:30 - Combinations and SPAC liquidity in the market
44:15 – Advertising/promotion as a business angle
Check out David's new podcast here: https://www.meetuppodcast.com/
AI And SaaS Valuations with May Habib, Founder/CEO of Writer
We haven’t covered artificial intelligence much on The Razor’s Edge, but it’s a theme that is only going to grow in market salience over the years to come. May Habib, this week's guest, has firsthand involvement with that theme. She is the founder and CEO of Writer, an AI business writing assistant. She explains her company's pivot to us, as well as sharing a little bit of Writer’s secret sauce, taking us through the COVID effects on the company and its end market, and casting light on the start-up funding market and where AI might go in the years to come. And given her background in wealth management and investment banking, we couldn’t let her go without asking for her take on the markets, especially semiconductors and SaaS, but also of course Twitter.
3:30 minute mark - Background on Writer and its target userbase
9:00 – Writer’s pivot in product and the coincidence with COVID
11:15 - How the pivot affected the AI models and the sales approach
15:30 - Differentiation for Writer and tailwinds in the business
19:00 - How building a SaaS has changed and the importance of a pivot
23:00 - Looking back on Covid
26:00 - Post-Covid World and the growing need for writing
29:30 - The global angle and the role of English 26:00
32:30 - AI replacing jobs 29:00
34:30 - Talking markets – semiconductors and SaaS – COVID hangover, and the future of work from home
We referred to In Defense Of The Pivot on the episode: https://upfront.com/thoughts/goat-in-defense-of-the-pivot
Digging Into The Rare Earths And EVs Rush With Don Lay
The 2020-21 bull market has seen many familiar themes recycled amidst a very liquid public market environment. The rare earths market, and its flag bearer Molycorp, may not have been the most obvious boom to re-emerge, but here we are. Molycorp's descendant, MP Materials, came public via a SPAC last year and is trading at a higher valuation than the legacy company ever did.
To break down the recent moves and what it means, we speak with Don Lay, VP of Corporate Development at Medallion Resources, a rare earths technology company based in Canada. Don was previously CEO of the company and has a lot of firsthand experience to share. We go through the ins and outs of this story, including China’s market position, the import of electrification in cars, and how MP Materials is back on the scene.
3:15 minute mark - Background on Don as well as MP and rare earths boom
8:45 - The Senkaku Islands incident
12:00 - Processing the rare earth minerals and the market power there
15:30 - Where China’s competitive edge comes from and Lynas's role in the industry
24:00 - The challenges of developing a greenfield rare earths project
26:30 - Demand for rare earths
30:30 - The end of the internal combustion engine
35:30 - Explaining MP Materials’ revival
41:30 - Where is the market power in rare earths
46:00 - How the rare earths market might evolve
51:00 - Where electric and hybrid vehicle demand goes and what it means
55:00 - How the EV frenzy affect operations for rare earth miners
1:00:00 - How this compares to past bubbles
1:03:00 - Tesla's position
1:08:00 - Background on Medallion
1:14:00 - The environmental costs
Breaking Down The GameStop Game
GameStop has become one of those rare market stories that has transcended the world of finance and entered pop culture; the most recent example might be the negative oil pricing last April. It's a fascinating and weird story for a number of reasons, and whether or not it has knock-on effects in the market it is an important story.
To break it down in an emergency episode, we speak with Jaime Lester, an experienced long-short professional investor who has been on the podcast before. He's done extensive work on GameStop, so we start with the fundamentals, before zooming back out to all the other factors. Those other factors all spin back to the start - do the fundamentals actually matter, and if not, why is that a problem?
1:00 minute mark - Gamestop fundamentally
10:00 - Underlying forces at play here
17:00 - The tether between value and price
24:30 - The consequences of this environment
31:00 - Why is this time different
38:00 - The Reddit dynamic
Netflix Flexes On 'Em
We talk Netflix again this week. As you may recall, Akram published a lengthy report late last year on why Netflix was and would remain the king of streaming. The company reported earnings last week, and it was a bit of a royal flex, as they beat on subscriber numbers and boasted that they would not need to raise debt capital going forward. The stock popped 17% the next day. So what did the market miss going in, and what does that mean for Netflix and peers going forward? We break it down, answer a few listener questions, and try to figure out what Netflix’s story going forward will be.
2:30 minute mark - Quick quarter reaction
12:00 - Why is Netflix winning
21:00 - How the story is shifting
27:30 - What Netflix’s margins actually say
38:00 - Netflix’s moat and the competition
47:00 - Forward outlook for NFLX
51:00 - Praise for management
55:30- Discoverability challenge for Netflix
1:05:30 – Netflix’s content strategy
1:10:00 - The fate of the theater
1:14:30 - Netflix’s tech positioning
1:24:00 - Pressure on the competition