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.
#33: In The Streaming Wars, What Game Does Disney Want To Play?
Famed activist investor Daniel Loeb wrote a letter to Disney management arguing that the time to go all in on streaming is now. We've been following the streaming wars pretty closely, and we decided to break down the letter and then reconsider Disney and Netlfix's positions a year after Disney+'s launch, and 8 months into a pandemic that has accelerated the streaming game. The question came down to 'what battleground do these companies want to actually fight on'? Topics Covered2:15 minute mark – The need for capital and Disney’s studio business history |10:00 – The SaaS parallel and Disney’s flywheel |16:30 – The new bundle, different from the old bundle? |24:30 – The 5d Chess around the streaming wars |27:00 – How enduring is the event model, theaters or otherwise? |30:00 – Costs in the new content world |35:45 – the looming presence of the big fish and how much growth is there still out there |43:00 – Takeaways for Netflix and Disney |53:00 – What sort of game are we playing |Works cited or that are relevant:Daniel Loeb's letter to Disney - https://www.scribd.com/document/479149667/Third-Point-Letter-to-Disney-October-2020Akram's Razor's reaction piece - https://seekingalpha.com/article/4380091-disney-field-of-streamsDoug Shapiro - https://medium.com/swlh/one-clear-casualty-of-the-streaming-wars-profit-683304b3055dProPublica - https://www.propublica.org/article/meet-the-customer-service-reps-for-disney-and-airbnb-who-have-to-pay-to-talk-to-you
#32: Slack's Tricky Position and the Tesla Bull Case (Along With A Counter)
We continue our conversation with Rajiv Sud, ad tech veteran and private and public markets investors. In this episode - essentially parts 2 and 3 of our conversation - we start with Slack and its challenges, as well as its surprising similarities to Twitter. We also quiz Rajiv on his time at AdMob and his outlook for the private tech sector, before concluding with a breakdown of his Tesla bull thesis. Topics Covered3:00 minute mark – Slack’s position6:00 – the two-front war, with Intel as an example9:00 – Slack’s marketing challenge, and it not being enough to be the product winner17:00 – Creating the urgency around Slack’s product21:00 – The marketing pitch24:00 – Chat as an engagement tool, and the fit with subscription businesses29:00 – A use case for Slack34:00 – A Twitter content play39:00 – AdMob buyout questions43:00 – Private market – what is Rajiv seeing? Competition and ninja tools49:00 – How does the SaaS competition play out among smaller companies?59:00 – The VC need for exits and how that affects the broader market1:07:30 – Rajiv’s Tesla bull case – software focused1:12:00 – The Elon Musk factor for Tesla bulls1:17:00 – Dissecting the fully autonomous driving future – who gets there first?1:25:00 – And once we get there, who is actually the winner?
#31: But Twitter's Quarter Was Really Good! With Rajiv Sud
Oops, it happened again. A company we follow closely on The Razor’s Edge reported earnings, met or beat expectations, and then sold off heavily along with a major market sell-off. Last time it was PagerDuty, this time it’s Twitter.To work through the quarter and perhaps the angst and anxiety around it, we speak with Rajiv Sud. Rajiv is a Silicon Valley veteran, with time logged at Google, AdMob – which was bought out by Google while he was there, at TellApart, and then at Twitter after Twitter bought TellApart. He’s been out of Twitter for about two years but as a shareholder and a frequent tweeter, he still follows the company closely. We break down the company's ad server issues and why they may be in the past, the deliberate approach the company takes to product releases, and why Jack Dorsey is maybe fine as Twitter's CEO. Topics Covered4:45 minute mark – Q3 Reaction8:00 – One-off effects of a weird 2020 for comparison’s sake14:30 – The challenges with the ad server and what changed19:30 – The Jack Dorsey question24:30 – The stand-alone nature of each company’s ad stack28:30 – The ad-tech graveyard30:30 – The MAP delay36:30 – How Twitter engages users, and the step-up from occasional to active41:30 – When does this scale, or the rising expenses53:30 – Differences between Google and Twitter from an insider’s perspective58:30 – Twitter’s engagement and the upside or money left on the table in the subscription ecosystem1:01:30 – Controlling the narrative
#30: SPACs, Influencer Investing, and 2020's Wild Market Swings, with Jaime Lester
This week’s episode is a conversation with Jaime Lester. Jaime has been a professional investor for more than two decades, has a lot of experience with short selling, as evidenced from our conversation with him back on episode #3, on Invitae. We revisit Invitae during this conversation, but we're more focused on the overall macro picture. Whatever happens in the last 8 weeks of the year, it's been a wild ride, and it's worth taking a wider view to understand everything.We cover SPACs, influencer investing, the manic element, the line between fraud and pivoting, and why this does not resemble the great financial crisis.Topics covered2:20 minute mark – high level take on what makes this market different11:00 – Blowing up the GFC comparison21:30 – Fundamental restructuring27:30 – The manic trading element33:45 – Why the new traders are winning41:30 – Staying out of the way52:30 – The SPAC phenomenon and what is fraud in the current market?1:03:30 – Influencer Investing and Invitae1:17:30 – The cult of the founder1:24:30 – TAMs: Valuations as compared to TAMs, how much do TAMs mean for a business’s prospects over time?
#29: Catching Up On Twilio's Big Moves With Captain Twilio and Justen Stepka
Twilio has had an exciting fall. First, Microsoft announced Azure Communication Services, viewed as a shot across the bow at Twilio in the developer driven communications space. Then, Twilio had its first investor day in three years, refreshing investors on their trajectory. Lastly, Twilio announced the purchase of Segment, a customer data platform that signals Twilio’s climbing of the value chain.To break it all down, we bring on Captain Twilio, an experienced investor whose portfolio features one stock, Twilio, and Justen Stepka, our frequent guest and an Atlassian and, more relevant to today’s conversation, Docker alum who has firsthand experience with Segment as a user. This is a fun conversation for anyone following Twilio, and it also adds interesting perspective on business strategy and SaaS valuations.Topics Covered3:15 minute mark - The Segment value proposition 9:15 - Recapping Twilio Signal and what it says for Twilio’s strategy 13:15 - So why did Segment sell? 19:15 - How Segment fits in 24:15 - Single customer risk as well as enterprise opportunities 28:45 - The analytical edge that comes from a data tool like Segment 31:45 - Build vs. buy and microservices architecture vs. monolithic when thinking about data 36:45 - Entering another giant’s territory…the pending showdown with Salesforce 48:15 - The right valuation approach and what metrics (and dollars) matter most References:Segment blog on gross margins: https://segment.com/blog/the-10m-engineering-problem/Jeff Lawson interview with Ben Thompson: https://stratechery.com/2020/twilio-acquires-segment-what-is-segment-an-interview-with-twilio-ceo-jeff-lawson/
#28: On The New York Streets With A Ride-Share Vehicle Supplier
This week’s The Razor’s Edge goes back out to the streets. We speak with Ali Naqvi, owner of a ride-share car supplier in New York, about his experience with the COVID lockdown, what he’s hearing from his customers – rideshare drivers – and the state of New York. While a few work from home comments pop up hear and there, this is more focused on the state of Uber and Lyft’s end markets and what that might mean for a broader economy. Ali is a lifelong New Yorker and has a rolodex of celebrity encounters and Al Pacino quotes to pull from, and this is a fun conversation. Topics Covered2:15 minute mark - Background on the business6:00 - Recounting the COVID story from March onward, dealing with vehicle returns12:40 - Drivers still on the road throughout - the adjustments needed22:00 -The hit to rider demand27:30 - Uber's support (or lack thereof)36:00 - The scene in New York now for rideshare demand - why it was worse than it seemed, why there are reasons for optimism now54:00 - The outlook for New York City, the effect of the social unrest, any crime knock-ons, and where does the city go from here?