Jamin Ball Profile picture
Sep 17, 2020 8 tweets 2 min read Read on X
Unity IPO will be a very interesting one to track - they're breaking from the traditional pricing mechanism. Typically investment banks take companies on a roadshow, collect and manage orders / allocations from large institutional funds, and then ultimately help set price
The Unity team is maintaining full control of pricing / allocations. They will collect bids from funds that have a price and a preferred # of shares. Based on all of these bids, the Unity team will then come up with a price.
Any fund with a bid below the price won't receive an allocation (no shares). For funds with bids at or above the selected price, the Unity team will decide how many shares to allocate (can be full or partial fill of the desired total).
It's still manually allocated (so we'll see how much better the Unity team can do than the bankers!). Their hope is to avoid the situation of bankers setting a lower IPO price to satisfy their "favorite" large investors
It's different than Google's dutch auction IPO process many years ago (because Unity is still manually setting price / allocations).

My take is they may be able to get ride of some of the "day 1 pop," but it largely won't change things
IPOs generally pop on day 1 because of the unique supply / demand dynamic - low float of shares end up trading (bc of lockup) which artificially can prop price up and cause it to "pop." Unfortunately that dynamic doesn't go away with Unity's structure.
I could be wrong, but this seems more like bells and whistles, than any kind of meaningful change to the IPO process. At the end of the day it does give the control to the company, which is a good step in the right direction, but it's still done manually
Now this is an interesting development: adding to the supply of shares that trade on day 1 (increasing the float) could really help they dynamic I described above

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More from @jaminball

Mar 2, 2023
After Q3 '22 Snowflake guided to 47% growth in 2023. Yesterday they dropped that guide to 40%. What was the cause? 3 things primarily (in ascending order of impact)

1. Change in existing customer purchasing behavior
2. Weaker new logo bookings
3. Slower ramp from newer customers
1. Change in existing customer purchasing behavior

Snowflake sells annual / multi year deals that come with minimum consumption spend. Once customers reach those committed spend levels, they have the choice to re-up with another multi-year commitment. Usually, they do...
...however, this quarter Snowflake saw more of these customers buy just enough capacity to get them through the next few months, nothing more.

Important to remember - the bigger impact of this is on bookings (more on this later), not revenue. Customers are still consuming...
Read 10 tweets
Feb 17, 2023
Some takeaways from the Datadog earnings call:

Positives
- Strongest new logo quarter
- Gross churn very low
- Healthy pipeline generation

Negatives
- More optimizations in Q4 than Q2 / Q3
- Things got worse in December
- Weak 2023 guide

$DDOG
The best summary quote from the earnings call was "Overall, we observed slower usage growth with existing customers while continuing to scale our new logo acquisition and new product cross-sells."
The tricky balance is the commentary around the record new logo quarter + strong pipeline generation with weaker near term optimization headwinds

Some quotes:

"we had our strongest new logo quarter to date, with a record level of new logo ARR bookings"
Read 9 tweets
Jan 31, 2023
Investing in infrastructure businesses, particularly data infrastructure, has been incredibly exciting over the last few years (and will continue to be!). A couple data infra stacks Im excited about

1) Analytics stack
2) Real time stack
3) Data Lake stack
4) AI stack

More below
1. The Analytics Stack (or Modern Data Stack). Typically consists of:
1) Data Source (transactional database, SaaS app, etc)
2) ELT tool (Fivetran, Airbyte, etc)
3) Data Warehouse (Snowflake, Redshift, etc)
4) Data Transformation tool (dbt)
5) BI (Looker, Sigma, etc)
We hear a lot about this stack. Budgets are massive for it, and many companies have hit escape velocity building different layers of the stack. How each vendor evolves will be interesting to watch. There are also newer parts of this stack emerging (Reverse ETL, Data quality, etc
Read 14 tweets
Dec 1, 2022
Consumption models under fire this year given easier to optimize (reduce) spend quickly. This pain happens quick.

However, everything I'm hearing pointing to new customer signups posing the biggest challenges currently, and expansion / churn seeing relatively less pressure...
...Models more reliant on new customer signups for growth feeling more pain now, vs consumption models felt it earlier in the year.

What do I think of this? 2023 might be the year consumption models actually show more resiliency (less growth decay)...
...If more of your growth is coming from scaling existing customers vs signing up new ones, it'll be easier next year when the burden of getting through procurement / legal for a new customer signup gets tougher.

Of course, it's never purely a business model question...
Read 6 tweets
Nov 30, 2022
Read through the Crowdstrike transcript. Some takeaways re macro. Let's start with the positives

1. Gross & net retention not deteriorating:

"Our dollar-based net retention rate was well above Q3 of last year and consistent with our Q2 performance, which was at the...
... highest level in seven quarters. Our best-in-class gross retention rates remained at record levels above 98%"

2. Enterprise sales cycles staying constant:

"In the enterprise, sales cycles or average days to close remain consistent with last quarter's modestly higher level."
3. Deals delayed, not lost:

"While sales cycles lengthen, we believe the vast majority of these deals are not lost, just delayed."
Read 16 tweets
Nov 29, 2022
Lots of interesting announcements from AWS at re:Invent today. Some new products, and some product enhancements. Data and Security are clearly top of mind for them. Some of my favorites below:
AWS Security Lake: A central data lake purpose built to store and analyze security data (primarily log data)

Link: aws.amazon.com/blogs/aws/prev…
AWS DataZone: data management service to catalog, discover, share and govern data

Link: techcrunch.com/2022/11/29/aws…
Read 14 tweets

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