David Rosenthal: belief

Transcript context

…If there’s one thing we should probably learn for ourselves on Acquired is it’s very likely we’ll see a pop on the first day no matter what and then in the weeks and months that follow that we should really be paying attention. Yeah. I think we and everybody were very excited and still are very excited about Lyft and their IPO. But there’s a lot of euphoria that has been tempered over the last several weeks. Let’s go into narratives here. Listeners, what we’ve decided to do in these IPO episodes is walk through what the bulls are saying and what the bears are saying. That way, as we’re getting into our discussion, we can have a baseline representation of both sides. On the bull case, I think their growth rate relative to their comps of Twitter and Snap is really encouraging. They’re growing much faster than Snap or Twitter. To put some numbers behind that, Pinterest grew its user base 23% last year. Twitter and Snap saw user numbers decline. When you think about this tier of ad-based internet social, I think we can leave social out for Pinterest, but social-ish ad-based business platforms, very interesting to compare there and very promising. The other thing is—this is from a great financial summary on Seeking Alpha that we’ll put in the show notes—if the growth rate for both revenue and expenses stays the same in 2019 as it did in 2018, Pinterest will be profitable. They’ll earn pre-tax $65 million because of the way that the business is monetizing well and user base continues to grow especially internationally. More monetization domestically and then growth internationally, there’s really going to be a business here. I think you’ve got to really whip out your discounted cash flow models to try and understand is it worth $13 billion over some time frame? But contrasting this against other IPOs that we’re seeing recently, where there may not be profitability in sight, it wouldn’t shock me if it happened in the next year or 18 months.…

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