#CotD - $EQIX
I'm writing about 5 digital infra cos in 5 days.

1: Equinix is a global Data Center leader. It epitomizes the compelling nature of digital infra, like those in the $BYTE Index.
• Huge Growing TAM
• Global
• High-Quality Assets
• Growth & Profitablty

🧵👇👇
1/x ImageImage
Huge Growing TAM:

Using data requires either internet access (off-premises) or local storage (your device, local server).

Off-premises data comes from Data Centers (video, SaaS, cloud, social). EQIX is a huge Data Center owner, selling into the inexorable digitization trend.
2/ Image
Global:
$EQIX is one of the largest Data Center cos, w/ 230 DCs globally.

It's a "1 stop shop" for enterprises that want to deploy cloud anywhere. Other DCs may focus on "hyperscale" cloud providers (FAANG). EQIX has HCPs but also a broader enterprise focus, w/ >10k clients.

3/ Image
High-Quality Assets
Since its founding, $EQIX invested >$30B of capital.

Its DCs knit together the internet: once in an EQIX DC, customers often "interconnect" w/ other networks & clouds inside the same DC, improving customer performance & stickiness. 95% of rev is recurring.
4/ Image
Consistent Growth & Profitability

$EQIX has grown revenue 500x since its 2000 IPO, increasing rev each yr.

Its adj EBITDA margin % is highly consistent (👇), as the economic profile of new Data Centers remains attractive.

It deploys capital via dividends, new build, & M&A.
5/ Image
Summary:
Data Centers knit together the internet. The data we live on comes from DCs and $EQIX is one of the largest DC owners globally, growing alongside data consumption.

At 24x EBITDA, it's a "4 cap" w/ growth as far as the eye can see, recurring revenues, & strong assets.
6/ Image
Note: I never intend Tweets as investment advice. This is simply a basic, high-level overview of what Equinix does and how one might begin to look at the business.

@maybebullish & @IODigitalIndex love cartwheels🤸‍♀️.

Like, follow, & RT if you want to see the next 4 overviews.

7/
One down, four to go. I'm using the hashtag #CotD to track my Company of the Day tweets.

-End-

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More from @compound248

3 Nov
#CotD #3 - American Tower

Operating 214k cell towers (43k US + Canada), $AMT is the world's largest tower owner. Its revenue has grown w/ mobile data usage. As this trend persists, & w/ 5G on the horizon, AMT may grow for years to come, like other $BYTE Index members.

1/x🧵👇👇 ImageImage
$AMT exhibits:

• Global scale
• Stable growth
• Durable, strong cash flow
• Levered capital returns

These attractive features, coupled with secular growth trends around mobile data consumption, have helped drive a 22% CAGR over the past ten years!! (7.3x your $)

2/ Image
Secular growth trends remain.

Recent organic rev growth has been mid-single digits and AFFO (cash flow) closer to 10%.

Rev. is primarily from LONG-term leases w/ huge mobile cos (eg, AT&T). These have inflation escalators and only a modest portion face renewal risk each yr.

3/ ImageImage
Read 11 tweets
2 Nov
1/x

Megacable - #CotD 2:5

With 4.1 mm unique subs (incl 3.75 mm broadband), Megacable is Mexico's #2 cableco. It's an example of a non-US $BYTE Index holding in last-mile connectivity.

High-Single Digits % Sub Growth + A Few % Price = Secular Growth near 10% p.a.

🧵👇 Image
EBITDA margins for non-US cablecos are often higher than in the US, as the cost pressure of video is less acute.

OTOH, ongoing capital intensity also tends to be higher, esp. for EM-based cos actively doing new-builds.

Mega:
50% EBITDA Margins and 30%+ CapEx as % Revenue.
2/
Given "EM risk" & higher capital intensity, Mega trades at a large discount to US comps:
<4.5x 2021E EV/EBITDA.

US cablecos are 8-12x and often carry 4-5x in debt! Compare to Mega's Net Debt/EBITDA @ 0.6x.

When Mega slows its growth CapEx phase, might its FCF margin expand?
3/
Read 8 tweets
22 Oct
Tweeps just announced that Recorded Spaces is imminent AND easily listening to Recorded Spaces will come with it.

(Small rollout at first, then expanding quickly after.)

Summary: Twitter’s entree into podcasting will be native audio…easy to see where it goes from here.

$TWTR
Another box to check on my checklist:
The implication is asynchronous audio is coming to TWTR, obviously including podcasts.

Recorded audio is a new surface for ADVERTISING. Inserting ads into recorded playbacks, where TWTR shares revenue with Creators…IFF they’re active professionals on Twitter (eg Super Follows).
Read 4 tweets
22 Oct
AmEx ($AXP) reported Q3. Bellweather for consumption & travel

• TOTAL spend volume passed 2019
• Global Travel & Entrtnmnt still off (will hit 80% of 2019 in Q4)
• Loan balances keep paying down (people reducing debt)
• Gen Z & Millnls biz up huge
• Perfmnc marketing💪

1/x
Look at Millnnils & GenZ. 70% of new platinum adds in this demo.👇

Part of this is aging into the product.

But also performance marketing combined w/ rewards positioning of AmEx cards. AmEx has unmatched travel & "experience" rewards + superior online/digital self-service.

2/x
Large & Global Corp spending - which is heavily influenced by business travel (and meals, client-facing events, etc.) - still down massively.

W/r/t travel:
- US is 80%+ of 2019
- Int'l still down by 50%

AmEx is becoming more and more of a consumer & SMB spend product.

3/x
Read 7 tweets
21 Oct
Below I pitch a $DWAC / Trump-SPAC bull case.

Getting a social platform off the ground is very doable. Getting a few million users is also very doable.

TRUTH likely needs an ad model + a subscription tier.

So what might the numbers look like if we give TRUTH credit?
🧵👇

1/x
If TRUTH is only extreme Trump fans, substantial ad monetization will be hard.

BUT let's assume TRUTH pulls it off reasonably well:

10mm DAUs

Bifurcating a subscription tier is also not easy (see Twitter), but let's assume a *very* strong 10% free-to-pay conversion.

2/x
Bull case on *just* TRUMP Social:

• 10mm DAUs
• Ad ARPU of $3/m
• 1mm paid subs (10% free-to-pay conversion)
• Subs net ARPU of $5/m

(10 x $3 x 12) + (1 x $5 x 12) = $420mm of revenue
40% EBITDA margins = $168mm EBITDA

10x Revenue or 25x EBITDA =
$4.2B EV

Not bad.

3/x
Read 8 tweets
21 Oct
Great long? Or greatest long?

The Trump / $DWAC TAM is…pretty big.

If I’m doing my math right, DWAC is easily a trillion market cap by mid-2022.

I mean, just look. At. That. TAM!

(This is a real slide from the TMTG (Trump Media & Trch Group) deck)
It’s huge. The hugest.
Read 4 tweets

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